Is the pension annual allowance gross or net of salary?
15 August 2022
Question by Steve
Is the pension annual allowance gross or net of salary? Net being take home pay after deductions. If I earn say £30k pa (gross), can I and my employer contribute a maximum of £30k into my only DC pension scheme or is it the net figure of £24k?
Answered by Boring Money
It's 100% of your total gross pay that is the figure to use.
This means that the total amount that could be put into your DC pension is £30,000 in the example you've mentioned.
Do bear in mind that this total allowance includes tax relief, so if you receive tax relief on your contributions, make sure you put in a low enough net figure that when tax relief is added along with the employer contributions, that you don't exceed your total pay for the year.
Hope this clarifies things
All the best