pension annual allowance (up to 100% of earning) what is included?

Secret2ndAccount

If you earn 32k, you can pay 32k including any tax relief into your pension. If your employer pays some of your salary into your pension, that comes off the 32k. If your employer also make an employer's contribution, that isn't part of the 32k.
Example. You earn 32k. Your employer deducts 2k before it calculates your income tax, and puts that 2k into your pension. That leaves you with 30k left to contribute. Your employer also pays a 3k employer's contribution into your pension. That makes no difference to your tax relief limit. It would count towards the Annual Allowance (60k) but that doesn't matter to you.
You open a SIPP. You pay in 24k. The taxman tops it up to 30k. That's your lot for the year.

There were 3 elements above:
Pay deducted before tax. No tax was ever paid on this money, so no tax relief needs to be added.
Contribution from take home pay. You (might) have paid tax on this. You receive a top up equivalent to tax relief.
Employer's contribution: not relevant to your tax relief calculations. 

byngga

Thanks guys - The last 3 replies were perfect.

Appreciate your clarifying.

byngga

To complicate things slightly, when I log into my pension portal, the monthly contributions are listed as "your employer has paid".  This figure is made up of both mine and my employer contributions.
I guess I need to look on my payslip (rather than the pension portal) so I can see separately what are my contributions and what are my employers contributions.

Dazed_and_C0nfused

byngga said:

To complicate things slightly, when I log into my pension portal, the monthly contributions are listed as "your employer has paid".  This figure is made up of both mine and my employer contributions.
I guess I need to look on my payslip (rather than the pension portal) so I can see separately what are my contributions and what are my employers contributions.

That sounds like you are using salary sacrifice.

That's where you don't contribute anything, hence no pension tax relief, you agree to a reduced salary in return for additional employer contributions.

byngga

Dazed_and_C0nfused said:

byngga said:

To complicate things slightly, when I log into my pension portal, the monthly contributions are listed as "your employer has paid".  This figure is made up of both mine and my employer contributions.
I guess I need to look on my payslip (rather than the pension portal) so I can see separately what are my contributions and what are my employers contributions.

That sounds like you are using salary sacrifice.

That's where you don't contribute anything, hence no pension tax relief, you agree to a reduced salary in return for additional employer contributions.

Yes, you are correct. My regular payments are taken out of my salary by salary sacrifice.  Then my employer pays their bit too.  

Wait, so are you saying that those contributions don't count towards the "100% of my earnings" limit?

Secret2ndAccount

Well, those contributions don't count towards the "100% of my earnings" limit, but they also don't count towards earnings, so, as D&C said "hence no pension tax relief".
You agreed with your employer a salary of 32k. Then you agreed to sacrifice say 4k into pension. So your employer reduced your salary to 28k and put 4k into your pension - an EMPLOYER's contribution - you never earned the money. This benefits you because you save both tax and National Insurance by not earning the money. It's the most efficient way to contribute to a pension for most people. Your employer also makes the usual employer's contribution. Your salary is now 28k and that's the most you can receive tax relief on.

byngga

Excellent - Clearly explained.  Thankyou.