Tax relief on pension contributions

I always get confused on the position re: annual allowances and tax relief on pension contributions.
I know that the annual allowance has moved from £40k to £60k.
Also, you can only get tax relief on contributions which do not exceed your income. This is where I get confused. My gross salary in 22/23 was £43,400. I’m a member of TPS and paid £21,600 into AVCs last year (22/23). I also got an estimate of my TPS pension input amount which was £27,899.65 for 22/23. My actual TPS contributions would have been around £4200 (9.6% contribution). Employers contribution is 23.68% so say approx £10k. If the actual contributions are used plus AVCs then I’m ok as the contributions are less than my gross salary. But if the PIA amount is used plus AVCs that takes me over my gross salary.

Is the PIA only relevant for the annual allowance calculation not the max salary/tax relief calculation? I know I’d be over £40k for AA purposes for 22/23 but I would have some allowance spare from the previous tax years.


  • Linton
    Linton Forumite Posts: 16,608
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    The PIA only applies to the annual allowance.  The earnings limit uses your actual contribution.
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