Salary sacrifice and marriage tax allowance

Janin1992

I recently sacrificed as much salary as payroll allowed. I am on minimum wage now. My other half does not pay tax as they earn less than 12.5K per year. Are we allowed to use marriage tax allowance transfer to reduce my tax bill even more? What other tax benefits can I have from having a minimum wage after salary sacrifice?

Am I right that I can sacrifice more than £40K per year If I take into account unused pension allowance from previous years?

Dazed_and_C0nfused

If you aren't liable to higher rate tax them you are eligible to receive Marriage Allowance.

If your wife isn't liable to higher rate tax then she is eligible to apply for Marriage Allowance.

Your wife's tax liability will be based on a reduced Personal Allowance of £11,310 in the current tax year.  So if she earns say £11,800 she will be taxed on £490.

You will get £262 knocked off whatever your tax liability is.

Your employer is unlikely to let you sacrifice any more as they will fall foul of NMW rules.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/interaction-of-tax-relief-and-annual-allowance/

Janin1992

I am totally confused now. Say for argument sake that my salary is 50K.Am I allowed to sacrifice 30K and ask my employer to pay 30K into pension? There is a rule that my pension contribution should not be larger than my income for a year. But if I sacrifice 30K my income becomes 20K. Does it mean that I am not allowed to sacrifice more than 50% into pension?

greatkingrat

If you are contributing via salary sacrifice, then all your deductions are legally considered as employers contributions and your taxable pay in the year is irrelevant.

Dazed_and_C0nfused

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/salary-sacrifice-facts/