Sal sac and SIPP contributions - interaction?
Posted: March 8th, 2024, 2:40 pm
If someone pays into a SIPP and pays into a company DC scheme via salary sacrifice is there any interaction other than the requirement to stay below the maximum total contributions in a year?
I'll use an example to hopefully clarify;
ASSUME NO ISSUES WITH TOTAL CONTRIBUTIONS -
Salary £50k
Sal sac pension contribution £20k ( I know there are some employer contribs too..)
Net pay £30k
What is the maximum that can be paid into a SIPP in the same year
(a) £30k
or (b) do they consider the sal sac part and say 'you can only contribute up to your earnings, and you've already contributed £20k sal sac so only £10k left this year to add to SIPP"
I assume it's £30k - otherwise you could bust your limit by contributing more than half salary via sal sac - but some online resources have muddied the water a bit for me... As far as I can see the only sal sac limit is you have to keep yourself above national minimum wage
I'll use an example to hopefully clarify;
ASSUME NO ISSUES WITH TOTAL CONTRIBUTIONS -
Salary £50k
Sal sac pension contribution £20k ( I know there are some employer contribs too..)
Net pay £30k
What is the maximum that can be paid into a SIPP in the same year
(a) £30k
or (b) do they consider the sal sac part and say 'you can only contribute up to your earnings, and you've already contributed £20k sal sac so only £10k left this year to add to SIPP"
I assume it's £30k - otherwise you could bust your limit by contributing more than half salary via sal sac - but some online resources have muddied the water a bit for me... As far as I can see the only sal sac limit is you have to keep yourself above national minimum wage