Help Centre for Employers

Are contributions taken before tax and NI?

Our process is defined by HMRC as a “net pay arrangement” and requires the company to take any contributions due from the employee from gross pay before tax. This means the employee’s taxable pay is lowered by the amount of their contribution, resulting in employees getting income tax relief at the highest rate that they pay.

Employer contributions are paid in addition and employees pay no tax on these contributions. National insurance is calculated on pay before pension contributions are taken so there is no impact to how much national insurance is paid unless the employer has chosen to use salary sacrifice.

…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
...its simple design means the pressure is taken off us as the employer and avoids costly administration charges, whilst removing the burden of choice and ensuring the best possible retirement outcome for our employees. — Matthew Johnson, Head of Compensation and Benefits at Adecco Group UK & Ireland
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
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