Maximising Pension Contributions for Low Earner

Lewiboy

Posting this question on behalf of a relative, my first post. Have searched forum google forum etc with no luck
Works for the NHS salary £10k so pays no tax (rounded up to make sums easier)
NHS Pensions contributions employer 20.6 % (£2060) employee 5.6% (£560) - not sure whether this should be included in the pension input contributions since no tax relief is received on these contributions.
HL SIPP - pays in £2880 returns £3600 (current but would like to maximise If possible)
My question is what is the maximum contribution that can be made to the HL SIPP without breaching the earning limit. 

Is it 0.8 x £10k = £8k or less given the NHS contributions ?
Any help will be greatly appreciated.

Dazed_and_C0nfused

Will her P60 actually show £10k or is that before net pay pension contributions?

Lewiboy

The £10k is the overall gross pay pre any deductions.

NedS

Lewiboy said:

The £10k is the overall gross pay pre any deductions.

So this is the maximum gross contributions they can make in any one tax year.
Contributions to the NHS scheme are £560 so they can contribute a total of  £10,000 - £560 = £9440 gross per year into their SIPP, or £7552 net which the tax relief will make up to £9440

Lewiboy

Neds - Thanks. Is the £560 increased to take account of the gross contributions I.e. £560 x 1.25 = £700 (although no tax relief is received on it) 

So £10k - £0.7k = £9.3k ( £7440 net)

NedS

The £560 is a gross contribution as it is taken before tax.

Lewiboy

Neds - Thanks for your help - to keep things simple if the HL SIPP net contributions is kept at £7k this will be in the safe side.

NedS

Lewiboy said:

Neds - Thanks for your help - to keep things simple if the HL SIPP net contributions is kept at £7k this will be in the safe side.

Yes, this will give you a little headroom. you can always make a slightly larger contribution in the final month once exact earnings become apparent. As long as the contribution is made before 6th April 2021it counts for this tax year (remember Easter is 2nd - 5th April, so 1st April is effectively the last banking day of the tax year, this year)