Paying into USS. Is the limit I can pay into each year gross or net?

Hi guys

9.6% automatically gets taken from my salary each month and paid into USS (and my employer contributes 21%). I also make monthly AVCs of 80%+ of my monthly wage.

I know I cant pay more than my annual income into USS each year, but is the limit I can pay into USS each year my salary 'gross' or 'net'?

'Gross' is my income before tax is it?

So if Im earning £50k, as long as my monthly 9.6% and my AVCs arent over £50k I should be ok?

Thanks

Comments

  • QrizB
    QrizB Posts: 16,896 Forumite
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    The limit is gross.
    What is the tax treatment of your AVC contributions? Net pay or relief at source?
    N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill member.
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  • Doctor_Who
    Doctor_Who Posts: 917 Forumite
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    dllive said:
    Hi guys

    9.6% automatically gets taken from my salary each month and paid into USS (and my employer contributes 21%). I also make monthly AVCs of 80%+ of my monthly wage.

    I know I cant pay more than my annual income into USS each year, but is the limit I can pay into USS each year my salary 'gross' or 'net'?

    'Gross' is my income before tax is it?

    So if Im earning £50k, as long as my monthly 9.6% and my AVCs arent over £50k I should be ok?

    Thanks

    It's more complicated than that! For DB schemes you need to calculate the benefit you accrue over the year, it's not the 9.6% of salary figure. Below is taken from the USS website:
    • For the Retirement Income Builder (defined benefit), the measure is based on the value of the benefits you’ve earned over the tax year (it’s not based on contributions from you and your employer). The value of your Retirement Income Builder benefits is calculated as 19 times your annual pension accrued in the tax year for AA purposes.
    https://www.uss.co.uk/for-members/pension-tax/annual-allowance
    'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.
  • QrizB
    QrizB Posts: 16,896 Forumite
    10,000 Posts Fourth Anniversary Photogenic Name Dropper
    dllive said:
    Hi guys

    9.6% automatically gets taken from my salary each month and paid into USS (and my employer contributes 21%). I also make monthly AVCs of 80%+ of my monthly wage.

    I know I cant pay more than my annual income into USS each year, but is the limit I can pay into USS each year my salary 'gross' or 'net'?

    'Gross' is my income before tax is it?

    So if Im earning £50k, as long as my monthly 9.6% and my AVCs arent over £50k I should be ok?

    Thanks

    It's more complicated than that! For DB schemes you need to calculate the benefit you accrue over the year, it's not the 9.6% of salary figure.
    You're quoting the annual allowance calculation, not the salary limit.
    Both apply; personal contributions are limited to your gross "relevant earnings", typically salary, and (personal + employer) contributions are limited to the annual allowance. Although unused annual allowance from the previous three years can carry over.

    N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill member.
    2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 3.6kw inverter. 33MWh generated, long-term average 2.6 Os.
    Not exactly back from my break, but dipping in and out of the forum.
    Ofgem cap table, Ofgem cap explainer. Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs, Best kettle!
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