Pension contributions.

grumpycaraboo

Hi All,
I have a question about pension contributions, my wife's employer is taking her pension contribution after tax is deducted,
This because if they took it from her pre taxed salary she would be below the minimum wage.
is this allowed ??

Dazed_and_C0nfused

grumpycaraboo said:

Hi All,
I have a question about pension contributions, my wife's employer is taking her pension contribution after tax is deducted,
This because if they took it from her pre taxed salary she would be below the minimum wage.
is this allowed ??

Pension contributions deducted like that are very common.

Is 25% of her contribution being added as tax relief by the pension company?

NB.  That is 20% of the gross contribution, not 25% tax relief.

TheSpectator

grumpycaraboo said:

Hi All,
I have a question about pension contributions, my wife's employer is taking her pension contribution after tax is deducted,
This because if they took it from her pre taxed salary she would be below the minimum wage.
is this allowed ??

Many people have their pension contributions taken after tax is deducted. What is the normal method for her employer? If it's salary sacrifice then it is correct you cannot salary sacrifice below minimum wage level.

dunstonh

I have a question about pension contributions, my wife's employer is taking her pension contribution after tax is deducted,
This because if they took it from her pre taxed salary she would be below the minimum wage.
is this allowed ??

It is not only allowed but also the most common method.
If she is a low earner then its the logical method too.  For both compliance with AE rules and making sure she gets tax relief benefit.