Help with query regarding company Pensions

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columbia
columbia Registered Posts: 580 Epic contributor 🐘
in Chat and off-topic discussion
Hi

Can anyone help me out please?

The director of the company I work for also has his wife working here. He wants to know if all her wages for the next few weeks can be paid directly to her company pension plan, if so will she have any other deductions on her earnings ie NI/Paye.

I know nothing about pensions, and only the basics as far as payroll is concerned, so any advice gratefully received.

Thanks

Tracy

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  • Nilesh Mandvia
    Nilesh Mandvia Registered Posts: 91 Regular contributor ⭐
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    What type of the pension?

    You do not mention what type of company pension you have.

    If it is stakeholder pension, you can make up to 100% of your earning. This needs to come out of employees net pay. So employee would pay Tax and NI, then remaining amount you can pay into stake holder pension plan.

    Once you pay contribution, pension provider will claim basic tax credit. So if you pay net £800.00, pension provide will claim and receive £200.00 from HMRC. Altother £1,000.00 will be invested in pension plan. This may obvious, I thought just mentioned them here.

    If an employees is higher rate tax payer he/she have to claim remaining 20% tax relief from HMRC (may have to file tax return).

    So emoloyees, initial pay Tax and NI, but they would get tax back but not NI.

    Hope this helps.

    Nilesh
  • columbia
    columbia Registered Posts: 580 Epic contributor 🐘
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    Thank you for your concise reply Nilesh.

    It is a stakeholder pension plan. I will now go back and let the boss know that we have to run payroll with normal ni and paye deductions, but we can transfer the net pay over to the pension scheme.

    Thank you so much :-)

    Tracy
  • Nilesh Mandvia
    Nilesh Mandvia Registered Posts: 91 Regular contributor ⭐
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    Pension

    Please do not take pension lightly. If you have got stake holder pension scheme, then you should have a financial advisro. You should speak to them. Who would be able to give you proper advise based on individual's circumstances.

    Nilesh

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