Maximum Salary Sacrifice

MF2015

Hi all.

I'm having trying to work out the maximum I can put into my pension via salary sacrifice.

Current salary is £40600 and I pay 7% into the pension with the company paying in 14% so £236 and £473.

I then get payed an additional 35% on the £40600 plus another few hundred in allowances taking me to just over £55000.

I then pay an additional £1200 into the pension. 

This is all via salary sacrifice.

What's the figure I need to put in to max out the 40k annual allowance. I don't have any other income at the moment. 

Thanks. 

Marcon

MF2015 said:

Hi all.

I'm having trying to work out the maximum I can put into my pension via salary sacrifice.

Current salary is £40600 and I pay 7% into the pension with the company paying in 14% so £236 and £473.

I then get payed an additional 35% on the £40600 plus another few hundred in allowances taking me to just over £55000.

I then pay an additional £1200 into the pension. 

This is all via salary sacrifice.

What's the figure I need to put in to max out the 40k annual allowance. I don't have any other income at the moment. 

Thanks. 

If it's by salary sacrifice then you aren't actually paying anything - and the distinction between you as an individual (where the pension provider claims basic rate relief and adds it to your DC 'pot'); and any employer contribution (whether truly from the employer, or as a result of salary sacrifice) is paid gross, so there is not tax 'top up' to your pot.

Check a couple of things:

1. how much the employer will allow you to salary sacrifice
2. how much you need to earn to meet minimum wage requirements (you can't salary sacrifice below this): https://www.gov.uk/national-minimum-wage

The employer's contributions aren't limited by earnings in the same way employee contributions are, so you can sacrifice up to £40K provided that you comply with 1. and 2. above

MF2015

Marcon said:

MF2015 said:

Hi all.

I'm having trying to work out the maximum I can put into my pension via salary sacrifice.

Current salary is £40600 and I pay 7% into the pension with the company paying in 14% so £236 and £473.

I then get payed an additional 35% on the £40600 plus another few hundred in allowances taking me to just over £55000.

I then pay an additional £1200 into the pension. 

This is all via salary sacrifice.

What's the figure I need to put in to max out the 40k annual allowance. I don't have any other income at the moment. 

Thanks. 

If it's by salary sacrifice then you aren't actually paying anything - and the distinction between you as an individual (where the pension provider claims basic rate relief and adds it to your DC 'pot'); and any employer contribution (whether truly from the employer, or as a result of salary sacrifice) is paid gross, so there is not tax 'top up' to your pot.

Check a couple of things:

1. how much the employer will allow you to salary sacrifice
2. how much you need to earn to meet minimum wage requirements (you can't salary sacrifice below this): https://www.gov.uk/national-minimum-wage

The employer's contributions aren't limited by earnings in the same way employee contributions are, so you can sacrifice up to £40K provided that you comply with 1. and 2. above

My employer has no limit but as you say, I need to be above the NMW. I'm over 22. If the company 14% payment is taken into account I believe I should be over that.

That's what I want to make sure as well as how much I should sacrifice on top of the £1200.

zagfles

It's up to your employer to make sure you're at or above min wage after the sal sac. For the annual allowance it's just the total going into the pension (assuming a DC scheme), yours and employer contributions. You may be able to carry forwards unused allowance from previous years if you exceed this year's AA.

Marcon

MF2015 said:

Marcon said:

MF2015 said:

Hi all.

I'm having trying to work out the maximum I can put into my pension via salary sacrifice.

Current salary is £40600 and I pay 7% into the pension with the company paying in 14% so £236 and £473.

I then get payed an additional 35% on the £40600 plus another few hundred in allowances taking me to just over £55000.

I then pay an additional £1200 into the pension. 

This is all via salary sacrifice.

What's the figure I need to put in to max out the 40k annual allowance. I don't have any other income at the moment. 

Thanks. 

If it's by salary sacrifice then you aren't actually paying anything - and the distinction between you as an individual (where the pension provider claims basic rate relief and adds it to your DC 'pot'); and any employer contribution (whether truly from the employer, or as a result of salary sacrifice) is paid gross, so there is not tax 'top up' to your pot.

Check a couple of things:

1. how much the employer will allow you to salary sacrifice
2. how much you need to earn to meet minimum wage requirements (you can't salary sacrifice below this): https://www.gov.uk/national-minimum-wage

The employer's contributions aren't limited by earnings in the same way employee contributions are, so you can sacrifice up to £40K provided that you comply with 1. and 2. above

My employer has no limit but as you say, I need to be above the NMW. I'm over 22. If the company 14% payment is taken into account I believe I should be over that.

That's what I want to make sure as well as how much I should sacrifice on top of the £1200.

Without knowing your hours of work, nobody here can give you an actual answer - but you should be able to work it out by multiplying your hours of work x minimum wage. If your employer is flexible on how much employees can sacrifice, they may well be able to confirm.

Not quite sure what you mean by 'If the company 14% payment is taken into account I believe I should be over that' - employer contributions don't count towards minimum wage (but possibly you meant something else).

MF2015

Marcon said:

MF2015 said:

Marcon said:

MF2015 said:

Hi all.

I'm having trying to work out the maximum I can put into my pension via salary sacrifice.

Current salary is £40600 and I pay 7% into the pension with the company paying in 14% so £236 and £473.

I then get payed an additional 35% on the £40600 plus another few hundred in allowances taking me to just over £55000.

I then pay an additional £1200 into the pension. 

This is all via salary sacrifice.

What's the figure I need to put in to max out the 40k annual allowance. I don't have any other income at the moment. 

Thanks. 

If it's by salary sacrifice then you aren't actually paying anything - and the distinction between you as an individual (where the pension provider claims basic rate relief and adds it to your DC 'pot'); and any employer contribution (whether truly from the employer, or as a result of salary sacrifice) is paid gross, so there is not tax 'top up' to your pot.

Check a couple of things:

1. how much the employer will allow you to salary sacrifice
2. how much you need to earn to meet minimum wage requirements (you can't salary sacrifice below this): https://www.gov.uk/national-minimum-wage

The employer's contributions aren't limited by earnings in the same way employee contributions are, so you can sacrifice up to £40K provided that you comply with 1. and 2. above

My employer has no limit but as you say, I need to be above the NMW. I'm over 22. If the company 14% payment is taken into account I believe I should be over that.

That's what I want to make sure as well as how much I should sacrifice on top of the £1200.

Without knowing your hours of work, nobody here can give you an actual answer - but you should be able to work it out by multiplying your hours of work x minimum wage. If your employer is flexible on how much employees can sacrifice, they may well be able to confirm.

Not quite sure what you mean by 'If the company 14% payment is taken into account I believe I should be over that' - employer contributions don't count towards minimum wage (but possibly you meant something else).

I work 38 hours per week.

What I was saying is I pay 7% before shift pay and they pay 14% before shift pay into a DC scheme so pension contribution is given by the company for the shift pay.