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Are employee pension contributions deducted from gross salary or net salary?

Are employee pension contributions deducted...

I just noticed that my employer (a LTD Company) has deducted my personal pension contribution from my net salary. Is this correct?

I thought personal pension contributions are deducted from the gross salary.

I should appreciate if some one can advise me before I approach my employer.

With thanks


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03rd Jan 2009 11:29

NI contributions
Just to comment further on NI contributions. If the scheme is 'contracted out' (which I expect it is) the NI contributions are less than if you were not in the pension. You can check this by seeing what letter is given to your NI contribution.

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03rd Jan 2009 10:30

Should be net
If it is a group personal pension scheme, as most smaller companies have and as Richie indicates in his question, the employee's contribution is paid net of basic rate tax relief and should be deducted from net salary. He will need to claim higher rate tax relief by entering the contributions paid in the appropriate box of his tax return.

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By pawncob
02nd Jan 2009 20:22

No it wouldn't make any difference as you're getting relief at your max tax rate.

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02nd Jan 2009 19:14

Even if I am a higher rate tax payer?
Sorry I forgot to add, I am a higher rate tax payer. Would this make any difference?

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By Anonymous
02nd Jan 2009 18:40

Usually Gross for Tax - Net for NIC's
Provided scheme is registered with HMRC then contribution should be taken before tax but after national insurance, giving tax relief (but not NIC relief).

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