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Help with a tax question please

6 replies

flounceitlikeaflouncer · 02/04/2025 18:43

Is my uk tax rate (20 or 40%) calculated on my gross salary less my pension contributions ? Or is it on my gross salary, regardless of how much pension contribution I make ?

OP posts:
Crispyapple · 02/04/2025 18:44

It depends - is your pension salary sacrifice?

flounceitlikeaflouncer · 02/04/2025 18:51

@Crispyapple my pension is automatically taken from from my salary by my employer. I have no choice. It's taken regardless. My employer then matches the contribution

OP posts:
flounceitlikeaflouncer · 02/04/2025 18:53

@Crispyapple just read what pension salary sacrifice is. I don't reduce my gross salary by my pension contribution.

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Crispyapple · 02/04/2025 19:46

If it your pension isn’t salary sacrifice, then your tax deduction is calculated on your gross pay, regardless of how much you contribute into your pension.
A lot of employers now offer the choice of your contributions being salary sacrifice, so may be worth checking with your payroll dept as this would reduce your taxable income, hence you would pay less tax.

marsaline · 02/04/2025 19:49

Crispyapple · 02/04/2025 19:46

If it your pension isn’t salary sacrifice, then your tax deduction is calculated on your gross pay, regardless of how much you contribute into your pension.
A lot of employers now offer the choice of your contributions being salary sacrifice, so may be worth checking with your payroll dept as this would reduce your taxable income, hence you would pay less tax.

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