Pension deductions

uk.business.payroll is next door ---------->

Every month I have £140 deducted for an NHS pension.

My question is does my NI and income tax derrived from the gross figure minus £140?

ie say my gross income was £1000 Then would I pay NI and income tax on £860?

Thanks for your help.

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Your tax is based on £860, but NI is based on £1,000.

HTH

No, you would pay NI on £1000 and income tax on £860.

NI should be roughly (9.4% of £1000-4.33*£97) - (1.6% of 4.33*(£97-£84)), and your income tax should be roughly 22% of £860-£515 (£515 being a twelfth of £5035+£2090-£2090*10%/22%).

N.I. is based on NIable earnings (which includes the 140 OPS conts).

I.T. is based on taxable earnings (which does NOT include the 140 OPS conts).

Aosmosis wrote:

I take it from that comment that your true income is not 1000, so the 140 true OPS conts (mentioned above) would not apply.

If your gross income was 1000, and you were paying standard NHS OPS conts of 6%, and all your earnings were NIable, and there were no other non-taxable earnings, then ...

... you would pay NI on 1000 and income tax on 940.

And this is not a payroll question.

Ignore him, he just wants to be left all alone in here with his knitting :-)

If that's what you think I'll have a pint of what you've been smoking thicko ;p

Every month I have 140 deducted for an NHS pension.

My question is does my NI and income tax derrived from the gross figure minus 140?

ie say my gross income was 1000 Then would I pay NI and income tax on 860?

Are you above state pension age? Do you get state pension as well? Those aged 65 or over (for men) don't pay NI - and in most cases those aged 60-64 as well if they aren't working. If you get state pension as well, it's paid gross but it's still taxable, so the whole deduction is made from your NHS pension for state+NHS pensions. You do get larger personal allowance of

7280 (for 65-74), but it's reduced if your gross income (including state pension) is between 20100 and 24590, and is cancelled out altogether (you get the basic allowance of 5035) if it's over 24590. This gives a good, easy-to-follow account of tax treatment for pensioners: Alec

along with alt.getalife.prick

Tro

"Alec" wrote

Hmmm. Most people *below* age 60 also don't pay NI if they aren't working, do they?

But there will, of course, be bands in both cases in which NICs and Income tax are not charged.

The guy's working for the NHS, not playing in bands.

"Terry Harper" wrote

Nah -- it *is* charged -- just at a zero rate (in those bands)!