Employer deducts pension before tax and NI...is this wrong?

[specialkallday]

My take home is about £45 a month higher because they do it this way and I'm worried at some point I'll be asked to pay it back..

They deduct my pension payment from the gross pay, then calculate tax and NI from that figure.

I understand it should be the other way round?

its correct

When I use the online calculators, they calculate tax and NI on my gross salary, not the lower salary when pension is deducted.

How can both be correct?

You can have a salary sacrifice pension (which is what you have). Some people choose not to, as it makes your gross pay lower which would be an issue when applying for a mortgage (for example)

Yes it's correct.

Your confusion maybe coming from the fact there are 2 ways you can get tax relief on yiur pension contributions:

1. Net Pay - deduct your PC from your pay before any tax is deducted.
2. Relief at Souce - deduct your PC your pay after ant tax is deducted.

Its a little more comolicated that that 😁There are benefits to both, but for most people Net Pay way is more beneficial.

So don't worry, it's all correct.

My employer takes the pension out pre tax
Thats one of the reasons why they are good from a tax efficiency point of view

Both are correct. Look up net pay and relief at source.

Your employer is probably doing a salary sacrifice method for the pension contributions. It's a way of saving both tax and NI on payments into the pension scheme.

Your pension department or HR is really the best place to go for information.

NI is normally deducted from gross pay. Tax is deducted after pension contributions taken so you get the tax relief on that.

If pension is being taken as a sal sac you should see it in the gross deductions column.

It's correct because your tax savings are tax free

Your pension savings I mean!

It's not an issue if you go through a broker

This is the best kind of pension to have

@stevalnamechanger

Employer pensions are better than brokers because the employer contributes!!!

You are misreading, my comment is regarding a mortgage broker not a pension