Page 17 - Budget Newsletter 2021
P. 17
A WORTHWHILE SACRIFICE
PERSONAL SALARY SACRIFICE
CONTRIBUTION EMPLOYER CONTRIBUTION
(SACRIFICED AMOUNT + NIC
SAVING)
Tax Rate 20% 40% 20% 40%
£ £ £ £
Gross Salary 1,000 1,000 Nil Nil
Employer Pension Contribution Nil Nil 1,150.5 1,150.5
Employer NI Contribution (15.05%) 150.5 138 Nil Nil
Total Employer Outlay 1,150.5 1,138 1,150.5 1,150.5
Employee Salary 1,000 1,000 Nil Nil
Less Income Tax (200) (400)
Less NI Contributions (13.25%/3.25%) (132.5) (32.5)
Net Pay = Net Pension Contribution 667.5 567.5
Tax Relief 166.9 378.3
Total Pension Contribution 834.4 945.8 1,150.5 1,150.5
PLANNING POINT
On 6 April 2016 the standard lifetime allowance was reduced to £1,000,000. It has since been increased in line
with inflation twice and will now remain to £1,073,100 until 6 April 2026. However, there is still the possibility of
claiming transitional protection of up to £1,250,000.
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