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    • NorthernMonkey1
    • By NorthernMonkey1 4th Dec 19, 1:01 PM
    • 306Posts
    • 1,152Thanks
    Pension Increase tax question
    • #1
    • 4th Dec 19, 1:01 PM
    Pension Increase tax question 4th Dec 19 at 1:01 PM

    Hello combined brains on MSE. A quick tax question for those cleverer than I

    I've attached my monthly payslip, which shows I pay 42% into my pension, and end up with a smidge over 2500 in my bank account each month. I've just been awarded a 2.5% pay increase, but want to keep my take home pay at 2500. What contribution level do I need to change my pension to, in order to keep a take home pay of 2500 after my pay rise. Pay rise only affects basic pay, and not all the other stuff on there
Page 1
    • Linton
    • By Linton 4th Dec 19, 1:52 PM
    • 11,540 Posts
    • 11,948 Thanks
    • #2
    • 4th Dec 19, 1:52 PM
    • #2
    • 4th Dec 19, 1:52 PM
    Hows about.....

    Your salary rises by 2.5% of 5505.02/month = 137.63 giving total income of 5642.65 /month.
    As you earn more than 50K/year your NI will rise by 2% of 137.63=2.75.
    So you need to put an extra 134.88 into your pension to take it up to 2446.98.
    2446.98=43.37% of 5642.65
    • purdyoaten2
    • By purdyoaten2 4th Dec 19, 1:57 PM
    • 1,049 Posts
    • 529 Thanks
    • #3
    • 4th Dec 19, 1:57 PM
    • #3
    • 4th Dec 19, 1:57 PM
    I make it 134.88 which is increase of 137.63 less additional NI of 2.50. ie keep the taxable pay the same.
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