P60 calculation with Salary Sacrifice

DeeKent

As I understand the P60 total for a year is the basis of Taxable pay.

So I should use Salary sacrifice and or bonus sacrifice to keep the values where I want them (under 100k in my case to avoid 60% tax trap)

If my pension contributions annually are say 20k via SS and my employer also contributes is my taxable pay 80k or do I also deduct the employer contribution to arrive at the taxable pay?

Additionally if I do a 100% salary sacrifice on my Bonus - I would deduct that amount also in full from the Taxable Pay total.

Anything I'm missing here?

Dazed_and_C0nfused

DeeKent said:

As I understand the P60 total for a year is the basis of Taxable pay.

So I should use Salary sacrifice and or bonus sacrifice to keep the values where I want them (under 100k in my case to avoid 60% tax trap)

If my pension contributions annually are say 20k via SS and my employer also contributes is my taxable pay 80k or do I also deduct the employer contribution to arrive at the taxable pay?

Additionally if I do a 100% salary sacrifice on my Bonus - I would deduct that amount also in full from the Taxable Pay total.

Anything I'm missing here?

You are overcomplicating things really. 

Other than deciding how much to sacrifice you don't do anything, your employer does it.

You can never deduct salary sacrifice pension contributions as you don't actually pay them, they are employer contributions, that's why no pension tax relief is added in your pension fund.

If your salary was say £100,000 and you sacrificed £20,000 then your P60, provided by your employer, would show taxable pay of £80,000.

You don't get any pension tax relief but you have avoided paying tax and NI on the £20,000 sacrificed.

DeeKent

Thanks for the reply,   but to be clear I pay in X amount and my employer also contributes 10%.  Their additional contribution is not part of my salary -  so is the P60 only showing the deduction of my contribution of the combined deduction. ?

Phoenix72

DeeKent said:

Thanks for the reply,   but to be clear I pay in X amount and my employer also contributes 10%.  Their additional contribution is not part of my salary -  so is the P60 only showing the deduction of my contribution of the combined deduction. ?

Nothing clear about what you are asking? 

As D & C said if you salary sacrifice £20k of a £100k salary your taxable pay is £80k. If your employer pays an extra amount on top that dies not affect your personal tax position in any way.

Dazed_and_C0nfused

DeeKent said:

Thanks for the reply,   but to be clear I pay in X amount and my employer also contributes 10%.  Their additional contribution is not part of my salary -  so is the P60 only showing the deduction of my contribution of the combined deduction. ?

If you pay in X then it cannot be salary sacrifice.

If you are certain they are your contributions then you need to check with your employer if they are operating a net pay or relief at source scheme as both work in completely different ways when it comes to tax.

Unfortunately this also means you don't get any NI saving.

Dazed_and_C0nfused

There is an explanation of salary sacrifice here

https://www.litrg.org.uk/pensions/paying-pensions/tax-relief-pension-contributions/pension-tax-relief-salary-sacrifice