Threshold income calculation

ramit

 All,

I am trying to work out what the threshold income is on the below

So this financial year 

Total Taxable Income: 204,000

There are zero earnings from savings/dividends/rental/benefits or anything else.

 

Out of this there is a netpay scheme which makes an employer contribtution directly from pay into a work pension. This financial year 12K has been contributed to this work pension via netpay.

When I calculate threshold income, is it 204K (above limit), or do I subtract the pension input this year of 12K from this through netpay. If I subtract it would take it to 192K meaning I would not be over the 200K limit?

Any help greatly appreciated!

Marcon

ramit said:

 All,

I am trying to work out what the threshold income is on the below

So this financial year 

Total Taxable Income: 204,000

There are zero earnings from savings/dividends/rental/benefits or anything else.

 

Out of this there is a netpay scheme which makes an employer contribtution directly from pay into a work pension. This financial year 12K has been contributed to this work pension via netpay.

When I calculate threshold income, is it 204K (above limit), or do I subtract the pension input this year of 12K from this through netpay. If I subtract it would take it to 192K meaning I would not be over the 200K limit?

Any help greatly appreciated!

An employer contribution has to be paid by the employer, so by definition can't be paid 'directly from pay'.

Three possibilities:

1. could you be referring to salary sacrifice?
2. is the pension contribution actually an employee contribution which is deducted from your gross pay before it is taxed?
3. is the pension contribution an employee contribution paid from net pay?

Please could you confirm?

There's a good explanation of how to calculate threshold income here: https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance#threshold

ramit

It is down on the payslip as ers pension?