Use our pension salary sacrifice calculator to see how you could benefit. Learn more about your workplace pension scheme. We apologise for any inconvenience caused. This will help you to send the right amount of worker contributions to us and make sure they get tax relief on their contributions from the government. By making an enquiry you accept that your information will be passed to one of the specialists. NEST doesn’t use this approach. Worker contributions depend on whether the worker is eligible for tax relief or not. You will need to provide details of all the personal pension schemes you’re contributing to, when these began and total gross contributions for that particular tax year. This is where we can help. See Tax relief if you don’t pay tax. How is personal pension tax relief calculated for basic-rate taxpayers? How is personal pension tax relief calculated for basic-rate taxpayers? Then they deduct 80% of your pension contribution from your net (after-tax) pay and send this to your pension provider. Unlike for basic-rate taxpayers, both higher and additional-rate tax relief is provided through an increase to the income tax thresholds by the equivalent of the gross contribution made to your personal pension plan. Call us on 0808 189 0463 or make an enquiry to get started. Tax rates may be different depending on where you live within the UK. Online Money Advisor is a trading name of FIND A MORTGAGE ONLINE LTD. Find a Mortgage Online Ltd is registered in England under number 8662127. Manage contributions/ Start a live chat with a one of our pensions specialists Monday to Friday 9am to 6.20pm. Taking control of debt, free debt advice, improving your credit score and low-cost borrowing, Renting, buying a home and choosing the right mortgage, Running a bank account, planning your finances, cutting costs, saving money and getting started with investing, Understanding your employment rights, dealing with redundancy, benefit entitlements and Universal Credit, Planning your retirement, automatic enrolment, types of pension and retirement income, Having a baby, divorce and separation, what to do when someone’s died, choosing and paying for care services, Buying, running and selling a car, buying holiday money and sending money abroad, Protecting your home and family with the right insurance policies, Coronavirus Money Guidance There are two ways in which you can do this ‘simple salary sacrifice’ and ‘SMART’ (Save more and reduce tax). - Get free trusted guidance and links to direct support. PruAdviser on-line services will be unavailable from 20:00 on Saturday 28 November until 12:30 on Sunday 29 November for website maintenance. Accept and close Our advisers will point you in the right direction. You won’t be able to amend a worker’s tax regime as this will be based on the information provided to us by HMRC. * Our chat is available from Monday to Sunday from 8.00AM to 8.00PM. The main advantage of salary sacrifice, is to maintain existing pension contributions at a lower cost or to increase pension contributions at no extra cost. For more information, see our cookie notice. With some workplace schemes you don’t pay pension contributions on your full salary, but on the part known as “qualifying earnings”. We also share information about the way you use our site with our analytics provider. The meanings used for the calculator are below: Salary sacrifice means you can exchange part of your salary in return for a non-cash benefit from your employer. The tax relief is then reclaimed from HMRC by the pension scheme, who send in a monthly request and get the cash back about six weeks later. These cookies will be used to track your preferences and only show adverts relevant to your interests. Book a free, no-obligation pension review today. With this method, whatever rate of tax you pay, you receive full tax relief without having to claim it. Your employer deducts the full amount of your pension contribution from your gross (before-tax) pay. Your employer deducts tax from your taxable earnings as normal. How do you get higher rate tax relief on personal pension contributions? It’s important to understand how to calculate tax relief. Here’s how tax relief works. Salary sacrifice (sometimes called salary exchange) provides an ideal opportunity to make pension contributions and save on National Insurance. Cookies in this category are necessary for the site to function normally, so cannot be turned off. How do I calculate tax relief? The alternative system is called relief at source. If you’re an additional-rate taxpayer (total income in excess of £150,000 for current tax year – 2019/20) you will only be able to claim the further 25% tax relief for your personal pension payments by submitting a self-assessment tax return. Both methods mean that the employee (and employer) pay less National Insurance. Employer contributions are set at a level you’ve agreed with us. Can I claim tax relief on my personal pension contributions if I’m a non-taxpayer? Relief at source: it means that your contributions are taken from your net pay (after your wages are taxed). How can I calculate higher or additional-rate tax relief on personal pension contributions? And any higher or additional rate taxpayers will need to claim the extra tax relief … Relief at source means your contributions are taken from your net pay (after your wages are taxed). We are an information only website and aim to provide the best guides and tips but can’t guarantee to be perfect, so do note you use the information at your own risk and we can’t accept liability if things go wrong.