Does this payslip look ok?

Jeremy535897

This explains the two most common types of employee contributions:
https://www.linklaters.com/en/insights/publications/uk-pensions/2020/august/uk-pensions---relief-at-source-versus-net-pay

Others like retirement annuity contracts only apply in very old cases.

Salary sacrifice is where you reduce your salary in exchange for the employer making additional contributions. This is quite a good guide:
https://www.royallondon.com/articles-guides/pensions-and-retirement/how-to-read-your-payslip-pension-deductions/

In that example, you can see that the tax is worked out as follows:
Gross pay £2,661, personal allowance for that year £11,500, tax at 20% on £2,661 less pension £200 less £11500/12 = £1,503 x 20% = £300.60 (4p out due to rounding). If your £159.86 is listed as a deduction, ask HR why your tax doesn't seem to deduct it in calculating the tax. You can always try calling HMRC to discuss it (try at 8am).

zagfles

Jeremy535897 said:

This explains the two most common types of employee contributions:
https://www.linklaters.com/en/insights/publications/uk-pensions/2020/august/uk-pensions---relief-at-source-versus-net-pay

Others like retirement annuity contracts only apply in very old cases.

Salary sacrifice is where you reduce your salary in exchange for the employer making additional contributions. This is quite a good guide:
https://www.royallondon.com/articles-guides/pensions-and-retirement/how-to-read-your-payslip-pension-deductions/

In that example, you can see that the tax is worked out as follows:
Gross pay £2,661, personal allowance for that year £11,500, tax at 20% on £2,661 less pension £200 less £11500/12 = £1,503 x 20% = £300.60 (4p out due to rounding). If your £159.86 is listed as a deduction, ask HR why your tax doesn't seem to deduct it in calculating the tax. You can always try calling HMRC to discuss it (try at 8am).

If you read that first link you posted it's obvious why:

"In a relief at source scheme, contributions are deducted from the employee’s net salary (i.e. after tax has been deducted). However, the employer deducts only 80% of the total contribution from the employee’s salary; the scheme then adds an amount equal to basic rate tax relief, which it then reclaims from HMRC."

Which is exactly what's happening here. OP's pension deduction is 80% of the 5% employee cont. 3996.40*0.05*0.8 = 159.86

OP can confirm by checking the pension scheme is claiming basic rate tax relief. (it may take a few months so might not be there yet if only been in job a few months)

OP needs to tell HMRC they are paying into a RAS scheme and ask them to adjust the tax code to give higher rate relief. As it also explains in that link.

Jeremy535897

zagfles said:

Jeremy535897 said:

This explains the two most common types of employee contributions:
https://www.linklaters.com/en/insights/publications/uk-pensions/2020/august/uk-pensions---relief-at-source-versus-net-pay

Others like retirement annuity contracts only apply in very old cases.

Salary sacrifice is where you reduce your salary in exchange for the employer making additional contributions. This is quite a good guide:
https://www.royallondon.com/articles-guides/pensions-and-retirement/how-to-read-your-payslip-pension-deductions/

In that example, you can see that the tax is worked out as follows:
Gross pay £2,661, personal allowance for that year £11,500, tax at 20% on £2,661 less pension £200 less £11500/12 = £1,503 x 20% = £300.60 (4p out due to rounding). If your £159.86 is listed as a deduction, ask HR why your tax doesn't seem to deduct it in calculating the tax. You can always try calling HMRC to discuss it (try at 8am).

If you read that first link you posted it's obvious why:

"In a relief at source scheme, contributions are deducted from the employee’s net salary (i.e. after tax has been deducted). However, the employer deducts only 80% of the total contribution from the employee’s salary; the scheme then adds an amount equal to basic rate tax relief, which it then reclaims from HMRC."

Which is exactly what's happening here. OP's pension deduction is 80% of the 5% employee cont. 3996.40*0.05*0.8 = 159.86

OP can confirm by checking the pension scheme is claiming basic rate tax relief. (it may take a few months so might not be there yet if only been in job a few months)

OP needs to tell HMRC they are paying into a RAS scheme and ask them to adjust the tax code to give higher rate relief. As it also explains in that link.

Yes of course that is the issue, that OP is not getting the higher rate tax relief on the pension contribution through his code at the moment.

chrisbur

Tax is looking pretty close to me (assuming pension taken from net)  For an exact calc. would need to know tax month or exact date of payment for this payslip along with gross to date and tax paid to date and then the same for the payslip before this one.

EDIT  On my assumption of pension did a calc on a non-cumulative basis
Gross 3996.40  tax allowance for this code for one month 930.76 
So taxable pay 3065.64
Tax due on 3065 (pence are ignored)

180  @ 19%  34.20
913   @ 20%   182.60
1498  @ 21%   314.58 
474    @ 41%  194.34

Total due  £725.72

Da_Crojanz

Thanks for all the responses. Can I make the call that the issue appears to be down to the RAS pension type but that I’m not getting higher rate tax relief? Would my next steps then be..

- confirm pension type with provider and query why I’m not getting tax relief at higher rate

- have the tax relief implemented and backdated (do I do this through HMRC / work / my pension provider)

Dazed_and_C0nfused

If it's RAS you have to notify HMRC.

For this tax year they will ideally want your estimated pay (P60 pay figure) plus details of the expected RAS contribution and then the can give any higher rate relief due via an increased tax code.

zagfles

Da_Crojanz said:

Thanks for all the responses. Can I make the call that the issue appears to be down to the RAS pension type but that I’m not getting higher rate tax relief? Would my next steps then be..

- confirm pension type with provider and query why I’m not getting tax relief at higher rate

- have the tax relief implemented and backdated (do I do this through HMRC / work / my pension provider)

You never get higher rate relief through the pension provider. They don't know your tax rate, they will always claim basic rate relief for RAS contributions. Check your statements, or online pension account transactions, and you should see them claiming £39.96 a month tax relief, that will confirm for certain that it's a RAS scheme. But as above it takes a couple of months so may not be there yet if you've just joined. Or check any pension booklet/info provided about the pension.

You need to tell HMRC that you're paying into a RAS scheme and they should adjust your tax code to give higher rate relief. If your salary or contribution level changes you'll need to let them know so they can adjust it.

zagfles

Dazed_and_C0nfused said:

If it's RAS you have not notify HMRC.

For this tax year they will ideally want your estimated pay (P60 pay figure) plus details of the expected RAS contribution and then the can give any higher rate relief due via an increased tax code.

I presume the "not" is a typo, probably meant "to"

Dazed_and_C0nfused

zagfles said:

Dazed_and_C0nfused said:

If it's RAS you have not notify HMRC.

For this tax year they will ideally want your estimated pay (P60 pay figure) plus details of the expected RAS contribution and then the can give any higher rate relief due via an increased tax code.

I presume the "not" is a typo, probably meant "to"

Correct.  Bank Holiday fatigue 🙁

Da_Crojanz

zagfles said:

Da_Crojanz said:

Thanks for all the responses. Can I make the call that the issue appears to be down to the RAS pension type but that I’m not getting higher rate tax relief? Would my next steps then be..

- confirm pension type with provider and query why I’m not getting tax relief at higher rate

- have the tax relief implemented and backdated (do I do this through HMRC / work / my pension provider)

You never get higher rate relief through the pension provider. They don't know your tax rate, they will always claim basic rate relief for RAS contributions. Check your statements, or online pension account transactions, and you should see them claiming £39.96 a month tax relief, that will confirm for certain that it's a RAS scheme. But as above it takes a couple of months so may not be there yet if you've just joined. Or check any pension booklet/info provided about the pension.

You need to tell HMRC that you're paying into a RAS scheme and they should adjust your tax code to give higher rate relief. If your salary or contribution level changes you'll need to let them know so they can adjust it.

Hi again - I just checked the account and can confirm that monthly there is about £38 - £39 tax relief. I imagine this has been the case since about last July when my salary went up. Can I add up the amount and claim back from HMRC or is it only possible to get it back form now? Also, can I claim the whole amount of the £39 each month?

Sorry for all the questions and thanks to all who replied. Has been really helpful, certainly way beyond the shoulder shrugging I'd get form the HR dept!