Pension Relief Tax at Source

Ducatiandy

Hi can some please confirm from these weekly figures that the higher rate pension relief 40% is already applied (on 20% pension contributions). I think its correct in effect paying less tax on the gross amount:
Payments
Basic pay = £1381.65
Deductions
Tax paid = £207.80
Employee's NI = £66.29
Pension = £276.33
I am assuming the tax should of been £309 and as only £207 is applied the difference £ 102 is the 40% relief on the £276 Pension payment (works out at 37%).
Therefore the extra 20% higher rate relief is already applied?
Many thanks.

Dazed_and_C0nfused

Ducatiandy said:

Hi can some please confirm from these weekly figures that the higher rate pension relief 40% is already applied (on 20% pension contributions). I think its correct in effect paying less tax on the gross amount:
Payments
Basic pay = £1381.65
Deductions
Tax paid = £207.80
Employee's NI = £66.29
Pension = £276.33
I am assuming the tax should of been £309 and as only £207 is applied the difference £ 102 is the 40% relief on the £276 Pension payment (works out at 37%).
Therefore the extra 20% higher rate relief is already applied?
Many thanks.

What tax code was used?

Ducatiandy

The standard 1257L

Dazed_and_C0nfused

Ducatiandy said:

The standard 1257L

Thanks.  Are they your pension contributions or have you sacrificed some salary in return for employer pension contributions?

Struggling to see how the NI can be right if you have made those contributions.

TheSpectator

Dazed_and_C0nfused said:

Ducatiandy said:

The standard 1257L

Thanks.  Are they your pension contributions or have you sacrificed some salary in return for employer pension contributions?

Struggling to see how the NI can be right if you have made those contributions.

The NI looks correct to me but getting the tax slightly lower at £200.20 if a net pay scheme in operation.

Sarahspangles

You’ve mentioned previously that you’re in the last month or so before retiring and were intending to “load’ various entitlements like accrued holiday into March and April.

Is your payslip identical week to week or have there been recent adjustments? 

Cobbler_tone

I love this stuff because although it can be complicated it is basic maths!

There isn't enough info here to work out the correct answer. The only thing I can take for sure is that the pension contribution of 20% is correct on a gross pay of £1381.65.
Not sure of the circumstance to get 40% tax relief on a projected salary of £16.5k a year.
What was the taxable pay on the pay slip? That is where is answer normally is.

TheSpectator

Cobbler_tone said:

I love this stuff because although it can be complicated it is basic maths!

There isn't enough info here to work out the correct answer. The only thing I can take for sure is that the pension contribution of 20% is correct on a gross pay of £1381.65.
Not sure of the circumstance to get 40% tax relief on a projected salary of £16.5k a year.
What was the taxable pay on the pay slip? That is where is answer normally is.

They were weekly amounts not monthly per OP.

Cobbler_tone

TheSpectator said:

Cobbler_tone said:

I love this stuff because although it can be complicated it is basic maths!

There isn't enough info here to work out the correct answer. The only thing I can take for sure is that the pension contribution of 20% is correct on a gross pay of £1381.65.
Not sure of the circumstance to get 40% tax relief on a projected salary of £16.5k a year.
What was the taxable pay on the pay slip? That is where is answer normally is.

They were weekly amounts not monthly per OP.

Thanks...the contribution rate of 20% and 40% tax relief makes sense. The rest is up in the air without knowing the taxable pay. With those figures the OP will be liable for some 20% tax and some 40% if the earnings were consistent for 52 weeks. A rough calculation suggests that amount of tax wouldn't be far off and from experience they rarely get it wrong. This is also assuming salary sacrifice.

A lot of threads on here are like trying to crack a puzzle without having the information needed, or at least trying to decode it.

FIREDreamer

Ducatiandy said:

Hi can some please confirm from these weekly figures that the higher rate pension relief 40% is already applied (on 20% pension contributions). I think its correct in effect paying less tax on the gross amount:
Payments
Basic pay = £1381.65
Deductions
Tax paid = £207.80
Employee's NI = £66.29
Pension = £276.33
I am assuming the tax should of been £309 and as only £207 is applied the difference £ 102 is the 40% relief on the £276 Pension payment (works out at 37%).
Therefore the extra 20% higher rate relief is already applied?
Many thanks.

No pension …

Deducting pension from salary and taxing the remaining salary …




The tax you paid of £207.80 is slightly higher than the calculation above of £200.44 but it does look like 40% has been provided. Obviously as I have deducted the pension (looks like 20%) you are not paying NI on the £276.33 whereas you actually do if you aren’t using salary sacrifice.

Ducatiandy

Thanks all, take home is
£829.23 and on a 53 week year (extra week for Christmas bonus is how split), it’s a normal looking week but have had a company bonus few weeks ago.
On a DB Scheme and the pension payment is the extra AVC’s into associated DC scheme. The pension payment is same value when viewed in DC scheme website so (as payments made) already has relief at what ever rate.