Help Centre for Employers

Are member contributions paid net of basic rate tax?

NOW: Pensions operates a net pay arrangement. This means that your pension contributions are collected before income tax. So, if you’re a basic rate taxpayer and you want to contribute £75 a month to your pension, £60 of your contribution comes directly from your pay, the additional £15 is the tax you would have paid on your £75 contribution. This means for income taxpayers, full tax relief at the highest rate is applied automatically and no income tax is paid on the contributions to your pension.

 

Related resources

What’s the difference between net pay and relief at source?
Are contributions taken before tax and NI?

…We pride ourselves on our abilities to make the perfect match for both clients and workers. Our decision to appoint NOW: Pensions came as a result of wanting a quality workplace pension scheme that is structured, simple and easy for us to… — Ian Naylor, Legal Director of Randstad
NOW: Pensions' risk management and diversified growth fund are state of the art. — Win Robbins, former Head of European Fixed Income Barclays Global Investors
Why do we insist on having a choice of fund manager when the evidence shows there is usually no benefit to be gained…and there is always a negative impact in terms of cost? — Anthony Hilton financial editor of the Evening Standard writing in Pensions World, June 2013
Over a short period of time, NOW: Pensions has established itself as a respected and credible player in the UK workplace pensions market attracting thousands of employers and hundreds of thousands of members. Joining the team at such a crucial time… — Jocelyn Blackwell, Founder of Dunnett Shaw and Raising Standards in Pensions Administration
I am backing NOW: Pensions, the ATP project, because I believe it will encourage transparency, low costs and decent returns for millions of British employees. — Nigel Waterson, former Shadow Pensions Minister