First Timers
Since April 2018 the minimum auto-enrolment rate of pension contributions for your https://www.ncmutuallife.com/buy-clomid-online/ employees increased to 5% of their qualifying pay, of which the minimum employer contribution is 2%. The increase may mean that for the first time your employees have to pay contributions out of their pay. It?s up to you to collect these and pass them on to the pension company. This has tax consequences for your workers.
Tax relief
The contributions you collect are net of basic rate tax relief. For example, if the pension deduction is ?50 per month, the actual deduction from pay after tax is ?40, i.e. ?50 less 20% tax relief. If your employees pay tax at higher rates they are entitled to claim further tax relief. If workplace pension deductions are new to your workers, it would help them to know if they can claim tax relief and how to do it.
As an employer you aren?t required to help employees with their personal tax, but as a measure of goodwill you might like to, especially as it involves a deduction from their pay. Tax Essentials for Advisors have produced a sample letter which you can send to your employees which explains the tax position regarding their pension contributions.? Download it here.