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.

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
...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
We decided to appoint NOW: Pensions because of the simplicity and robustness of its scheme. The NOW: Pensions product is both cost effective and straightforward to implement... — Mark Roberts, Managing Director at gap personnel
“We were impressed with the simplicity of its scheme. The ease of implementation was also a big plus for us and has removed much of the administrative headache.” — Neil Tune, HR director at Fitness First
I've known ATP for many years and have enormous respect for the effectiveness of their investment strategy. I'm convinced that NOW: Pensions can become a major player in the UK and look forward to being a part of that success. — Chris Daykin, the former Government Actuary