Help understanding payslip

jwk2002

Hi

I recently started a new job and received my first payslip. I am having difficulty getting the numbers to add up, specifically around my pension contribution which should be 5% (plus 3% from my employer).

Gross salary = £60,000
Total gross pay for month = £3846.20 (I joined one week into the month so this is adjusted pro-rata)
Tax = £559.40
NI = £365.88
Student Loan = £196.00
Pension = £133.05

£133.05 is 5% of £2661 and no combination of the Tax/NI/Student Loan deductions come to this value. Am I missing something in how this has been calculated?

Thanks

nick74

£133.05 is 4% of £3326.20, which is your gross pay for this month less the £520 qualifying earnings threshold. Your employer is obviously paying pension contributions on your 'qualifying earnings' only (which they are entitled to do).

https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/declare-your-compliance/ongoing-duties-for-employers-/earnings-thresholds

It's 4% rather than 5% because the remaining 1% is the basic rate tax relief received by the pension provider direct from HMRC

jwk2002

I see - so there's a range between £520 (lower) and £4,189 (upper) that my pension contribution will be based on? 

nick74

jwk2002 said:

I see - so there's a range between £520 (lower) and £4,189 (upper) that my pension contribution will be based on? 

Yes that's correct. 

jwk2002

nick74 said:

jwk2002 said:

I see - so there's a range between £520 (lower) and £4,189 (upper) that my pension contribution will be based on? 

Yes that's correct. 

As a result, if I wanted to increase my contributions would it be better to do it via the workplace pension or set up a private one? Or does it not matter?

nick74

As it looks like your employer may be unlikely to match any additional contributions you make (perhaps worth asking them though) it doesn't really matter whether you make additional contributions to this pension, or start one of your own.

jwk2002

nick74 said:

As it looks like your employer may be unlikely to match any additional contributions you make (perhaps worth asking them though) it doesn't really matter whether you make additional contributions to this pension, or start one of your own.

Yes that's right - their contribution is capped at 3% so I won't see any further benefit. Thanks for all your help!