I’ve just been working out my wage and tax

[Guest]

.. and national insurance appears to be coming off my top line before my pension is taken off. I was always under the impression that the pension should come off and then you pay tax and insurance on the remainder minus your tax allowance of course.

UK based, please can anyone advise?

Thanks

[Sara]

You need to opt for salary sacrifice if you can, this will take your pension before tax and NI. On the plus side it reduces these deductions, but on the downside if you applied for a mortgage, I believe a lender would use your salary after the sacrifice as the basis of the loan.

[Claire]

Well it should come of before tax as you will get taxed when you retire.

[Helen]

Tax and National Insurance are different. You pay National Insurance on the whole amount (over the personal allowance) but pay tax after your pension contributions are taken off.

[Su Corringham]

It depends on the scheme but in your case it appears you get taxed on all your salary. The money is then taken and put in your pension. The government then puts the amount of tax that you paid on your pension payment into your pension. Look at the pension statement for your contribution and it will show you.

[Albert]

Someone should be discussing with your employer about doing salary exchange, whereby the national insurance is deducted, but 100% is paid into your pension for you.

[Angie]

Depends if you are doing salary exchange.

SE pension contributions are taken before tax man touches it, makes your salary look less but its not, if not then salary will be taxed and contributions taken after tax.

[Sheri]

Our scheme it is deducted from our net pay, and the pension company then receive the tax & ni we have paid on it back from the government and add to our holding. This should be shown on the annual summary you receive from your pension company.