Employer Contributions Flashcards
How much can an employer contribute to an employee
limitless, corporate tax relief for the company. However if exceeds the personal allowance for individual, an annual allowance charge will apply to them
Which type of bonus has to be documented when sacrificed, Contracted or discretionary?
Contracted as part of the normal and expected contracted pay. Has to be done correctly and before the pay is received or deemed received.
Discretionary can be given up by the member and employer add to a pension, no documentation. However must be done before the bonus is paid, cannot be revoked.
What is Notional Salary
Notional Salary is:
to determine an increase in pay;
• to calculate overtime rates;
• to work out entitlement to holiday pay or sick pay etc;
• to determine pensionable pay under a DB pension scheme.
Do you need to have earnings in the previous three years to use carry forward?
No - You can still carry forward the unused relief.
If someone has earnings in the previous three years with Carry forward, what do you need to consider?
Earnings at the time, the annual allowance, taper allowance and adjusted income.
This is important as you need to know if they made they right level of contributions during those years.
