When you set up your workplace pension with The People’s Pension, you can choose to deduct your employees’ contributions from their wages either before or after tax.
Tax relief can be applied in two very different ways (and it’s important to get it right):
- Deducting employee contributions after tax? We call this the net tax basis. You may see HMRC referring to this as the ‘relief at source’ method. When you sign up to The People’s Pension, we’ll automatically set you up on the net tax basis.
- Deducting employee contributions before tax? We call this the gross tax basis. You may see HMRC referring to this as the ‘net pay arrangement’ method. If you choose this option, you’ll need to call us on 01293 586666 to set this up.