Caden said:
@Bell
If your base salary is over £50,270, any bonus will have a 2% NI for you and 13.8% (soon 15%) for the employer.
Just to clarify, the idea is whether to take a bonus as cash and then adjust SS, or put the bonus straight into the pension. In both cases, the same amount ends up in the pension.
@Bell
I’ve always wondered if it’s possible to set a high salary sacrifice percentage for a few months and then drop to 0% for the rest of the year. Would that be an issue?
Bowie said:
@Bell
I’ve always wondered if it’s possible to set a high salary sacrifice percentage for a few months and then drop to 0% for the rest of the year. Would that be an issue?
In some situations. If your yearly income is under £50,270 and you make at least £1,048 monthly, you could do that and save some tax overall.
@Bell
Your approach assumes the bonus receiver is a basic taxpayer.
Jesse said:
@Bell
Your approach assumes the bonus receiver is a basic taxpayer.
If someone with a £12k/month income takes a £20k bonus, they’ll pay less NI if they increase their SS for a few months rather than putting it directly into the pension.
Maybe they just don’t want to deal with the legal side of pension contributions, especially with all the complex rules involved. They probably don’t want to worry about things like the minimum wage or if someone goes over the Money Purchase Annual Allowance.
@Logan
How would changing contributions more often cause legal problems?
Alix said:
@Logan
How would changing contributions more often cause legal problems?
Not sure exactly. I’ve heard that HMRC might question the scheme if employees change their rates too often. My employer only lets us change once a year.
Higher salary sacrifice helps companies save on employer NI. Some companies put this into contributions. I’d check with HR about this.
Kit said:
Higher salary sacrifice helps companies save on employer NI. Some companies put this into contributions. I’d check with HR about this.
Thanks, I’ll ask HR.
You might find some useful tax calculations on this page: Tax Traps and Tax Efficiency - UKPersonalFinance Wiki
Shan said:
You might find some useful tax calculations on this page: Tax Traps and Tax Efficiency - UKPersonalFinance Wiki
I’ve used Gift Aid for a similar situation to keep myself below thresholds. It’s been helpful in a few cases, like when I wasn’t sure about dividends until year-end.
That’s funny, there are other ways to use gift aid beyond just gifting goats! 
To calculate, just take the gross amount and multiply by 0.8.
For claiming back, either write to HMRC or do self-assessment.
Joss said:
To calculate, just take the gross amount and multiply by 0.8.
For claiming back, either write to HMRC or do self-assessment.
Thanks! Why 0.8 when I get 40% relief? I thought £100 gross is £60 net, so shouldn’t I pay £60 upfront?
@Corey
You only get basic rate relief automatically; the rest you claim. So £80 + £20 = £100 in pension, with the remaining £20 back to you later.
Ben said:
@Corey
You only get basic rate relief automatically; the rest you claim. So £80 + £20 = £100 in pension, with the remaining £20 back to you later.
So if I pay £60, topped up by 20%, then get the extra 20% later, that way I only pay £60 in a month, right?
@Corey
No, the first 20% is added directly by the pension provider, and the extra 20% is for you to claim later. Paying £80 will end up as £100.
Ellis said:
@Corey
No, the first 20% is added directly by the pension provider, and the extra 20% is for you to claim later. Paying £80 will end up as £100.
!thanks
Ellis said:
@Corey
No, the first 20% is added directly by the pension provider, and the extra 20% is for you to claim later. Paying £80 will end up as £100.
That’s exactly what I was looking for! Thanks for clearing that up.