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Maths question: Basic Rate Sal Sac with employers NI contribution above annual allowance
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michaels
Posts: 29,092 Forumite


Does it make sense to sal sac over the annual allowance for a basic rate taxpayer if you also benefit from 10% of the employer NI saving and will pay basic rate in drawdown?
£100 sal sac plus 10% employer ni = £110 less 20% AA charge = £88 less 15% income tax on drawdown = £74.80
£100 less 20% income tax less 12%NI = £68
Is this correct?
£100 sal sac plus 10% employer ni = £110 less 20% AA charge = £88 less 15% income tax on drawdown = £74.80
£100 less 20% income tax less 12%NI = £68
Is this correct?
I think....
0
Comments
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I'm often interested why someone would questions like these?
If real world, give us the real figures.1 -
Looks right, but if doing it long term then the LTA will very likely become an issue which would definitely tilt the equation the other way.ETA: actually the above assumes scheme pays, and so criteria have to be met - google "annual allowance charge scheme pays". Without scheme pays, the £22 would come off post tax income not pre-tax, it would still seem beneficial, but only just (£71.50 vs £68)
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Andrew31 said:I'm often interested why someone would questions like these?
If real world, give us the real figures.I think....0 -
So its just a hypothetical.0
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