Is my workplace pension contribution deductible from taxable income?
19 June 2023
Question by Mia
Hello,
My company offers a benefit fund from where I can make pension contributions (or buy other benefits) via salary sacrifice or take as cash. Pension contributions are not matched. I am looking to reduce my adjusted net income to below 100k. I pay about 6% right now. Does this 6% count as my contribution and therefore deductible from taxable income to reduce my adjusted net income to below £100k or does it count as employer contribution as I have been given a benefit fund?
Answered by Lisa Caplan
Hi Mia
Making the pension contribution via salary sacrifice will effectively reduce your taxable income. I am not sure how far above the threshold you are, but this is a very good way to get back your personal allowance which starts to be reduced when your income is over £100,000.
You don't have to use salary sacrifice to achieve this, you can make a personal contribution, but it's much simpler and tidier.
Hope this helps,
Regards
Lisa
Answered by
Lisa Caplan
Director Foundation Planning
I am a chartered Financial Planner, with over 14 years of experience helping people to understand their financial position and to make good financial decisions. I offer easily accessible and digestible guidance and advice on key areas, so that you can move forward with confidence.
