Salary Sacrifice

[pilchardthecat]

Does anyone know if there's an upper limit to salary sacrifice for pension contributions?

[nej606k]

£50k I believe.

[Countdown]

nej606k said:

£50k I believe.

You can put in as much as you want but you only get tax relief on £50k. Also if you're a higher rate tax payer you'll have to claim some of the tax relief back by contacting hmrc

[pilchardthecat]

I thought with sacrifice you pay out of gross as an employer contribution, so no need to claim income tax back from hmrc as its no longer taxable income?

[PurpleMoonlight]

pilchardthecat said:

I thought with sacrifice you pay out of gross as an employer contribution, so no need to claim income tax back from hmrc as its no longer taxable income?

Yes, that's correct.

The current maximum contribution is £50,000 pa, but if there is unused allowance from the previous three tax years that can be brought forward to the current one in addition.

From next tax year it's reducing to £40,000.

You also need to watch something called the Pension Input Period. This is the same as a company financial year end, so if the pension PIP is 1st June - 31st May for example a contribution now will actially count against next years allowance.