Your employer’s contributions are based on your your gross pay (pay before tax). However, your own contributions are taken from you after you have paid tax.

You pay a reduced contribution, which takes account of the tax relief that the pension provider will claim back on your behalf. Therefore, for example, if you wanted to pay £100 we would take £80 from your net pay (£100 less £20 basic rate income tax). The pension provider would then claim back £20 from HM Revenue & Customs, so the total amount going into your pension fund based on your contributions would be £80 + £20 = £100.

If you are a higher rate or additional rate taxpayer, you should contact HM Revenue & Customs to claim the extra tax relief.

Published:
27 January 2022
Last updated:
27 January 2022