Actual loss from pay
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Noobie2011
Posts: 289 Forumite
Hi,
Not sure if this is the right place to post this but I am starting to look into maxing out our Pension contributions in terms of getting the max company contribution but wanted to know if my figures are correct below so I have a good starting point.
As said the % I used are matching the max we would have to put in to get the max the company would put in and then have tried to work out what is going into the pension pot(before any interest etc) and of that what we would actually be losing from our pay.
I have stuck my Tax Allowance calculations for my wife below as she not only falls into the 40% for some of her wage but also gets paid every 4 weeks.
Appreciate any feedback if going wrong and also in terms of the Interest earned I have been told go off 5% and presume this is calculated yearly?
Wife Tax Allowances - Wage £48,500
Yearly
0% £11,850.00
20% £34,500.00
40% £2,150.00
Weekly
0% £227.88
20% £663.46
40% £41.35
4 Weekly
0% £911.54
20% £2,653.85
40% £165.38
Wife
Wage £48,500.00
Basic £42,800.00
Car Allowance £5,700.00
Gross Allowance for Pension(Minus Car All) £3,286.36
My Pension Contribution £230.05 7%
40% Tax Relief £66.15
20% Tax Relief £12.93
Loss from my pay £150.96
Company Contribution £230.05 7%
Total Monthly Contribution £460.09 14%
Myself
Wage £31,000.00
Gross Allowance for Pension £2,583.34
My Pension Contribution £129.17 5%
20% Tax Relief £25.83
Loss from my pay £103.33
Company Contribution £180.83 7%
Total Monthly Contribution £310.00 12%
Not sure if this is the right place to post this but I am starting to look into maxing out our Pension contributions in terms of getting the max company contribution but wanted to know if my figures are correct below so I have a good starting point.
As said the % I used are matching the max we would have to put in to get the max the company would put in and then have tried to work out what is going into the pension pot(before any interest etc) and of that what we would actually be losing from our pay.
I have stuck my Tax Allowance calculations for my wife below as she not only falls into the 40% for some of her wage but also gets paid every 4 weeks.
Appreciate any feedback if going wrong and also in terms of the Interest earned I have been told go off 5% and presume this is calculated yearly?
Wife Tax Allowances - Wage £48,500
Yearly
0% £11,850.00
20% £34,500.00
40% £2,150.00
Weekly
0% £227.88
20% £663.46
40% £41.35
4 Weekly
0% £911.54
20% £2,653.85
40% £165.38
Wife
Wage £48,500.00
Basic £42,800.00
Car Allowance £5,700.00
Gross Allowance for Pension(Minus Car All) £3,286.36
My Pension Contribution £230.05 7%
40% Tax Relief £66.15
20% Tax Relief £12.93
Loss from my pay £150.96
Company Contribution £230.05 7%
Total Monthly Contribution £460.09 14%
Myself
Wage £31,000.00
Gross Allowance for Pension £2,583.34
My Pension Contribution £129.17 5%
20% Tax Relief £25.83
Loss from my pay £103.33
Company Contribution £180.83 7%
Total Monthly Contribution £310.00 12%
0
Comments
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Pensions do not earn interest. They are generally invested and aim for a return based on the level of risk you indicated when you sighed up (maybe the default if you didn''t express a preference/didn't realise what you were being asked). They might make 5%, or 10% or -10% if the stock market falls. It is important that you understand this.I’m a Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Pensions do not earn interest. They are generally invested and aim for a return based on the level of risk you indicated when you sighed up (maybe the default if you didn''t express a preference/didn't realise what you were being asked). They might make 5%, or 10% or -10% if the stock market falls. It is important that you understand this.
Ah yeah I think I probably got the terminology wrong there but have not included that in the figures above as only going off(if my figures are correct) what is certain as of now.
So really more interested in if my figures are correct and then can easily work out an estimate of what the Pension will rise by monthly, total loss from our salaries and the impact if we up our contributions in the future which we are planning to do as much as possible once all of our debt starts to clear0 -
salary sacrifice or not?I’m a Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
-
If 'your' contributions are being made via salary sacrifice, it's a simple calculation because 'your' contribution technically becomes an employer contribution, so you simply need to reduce your gross salary by whatever amount you are sacrificing.
Then calculate tax/NI payable on your post-sacrifice salary. Try https://www.moneysavingexpert.com/tax-calculator/0 -
If 'your' contributions are being made via salary sacrifice, it's a simple calculation because 'your' contribution technically becomes an employer contribution, so you simply need to reduce your gross salary by whatever amount you are sacrificing.
Then calculate tax/NI payable on your post-sacrifice salary. Try https://www.moneysavingexpert.com/tax-calculator/
Right so my figures above I can see where I am maybe wrong as I am trying to calculate in the way of the £130 I am sacrificing is £130 but in terms of net pay loss it would only be £104 as 20% tax would have been taken off that0 -
And there is the NI saving too - 12% for a basic rate tax payer.
Your employer may also give you the NI they are saving too (mine doesn!!!8217;t, Dh!!!8217;s Does)I’m a Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
And there is the NI saving too - 12% for a basic rate tax payer.
Your employer may also give you the NI they are saving too (mine doesn!!!8217;t, Dh!!!8217;s Does)
Okay so I think I am more confused now that I thought I was in terms of are our pensions salary sacrifice, tax relief etc.
On my wifes payslip the pension amount is on the left and deducted before tax so I presume this is Salary Sacrifice.
As I have just started with a new company my payslip does not have any pension deduction on there yet. But there is an online calculator for my company pension and on the figures after I have entered my % contribution it has Net Contribution and Tax relief which match my workings out above.
So does this mean I am on salary Sacrifice too or is my pension being taken from my net pay0 -
Noobie2011 wrote: »
On my wifes payslip the pension amount is on the left and deducted before tax so I presume this is Salary Sacrifice.
As I have just started with a new company my payslip does not have any pension deduction on there yet. But there is an online calculator for my company pension and on the figures after I have entered my % contribution it has Net Contribution and Tax relief which match my workings out above.
So does this mean I am on salary Sacrifice too or is my pension being taken from my net pay
Sounds as if your wife's pension contributions are taken from her gross pay before tax is deducted (that's not the same thing as salary sacrifice).
Whether you are on salary sacrifice depends on what you've signed up to. The info you've given doesn't enable anyone else to work that out. Check your paperwork or ask your HR/payroll people.0 -
You need to ask about Sal sac - not everyone is offered it.
also read the tread on here called Salary Sacrifice Query.I’m a Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0
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