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Tax relief on employee pension contributions

If an employer establishes a pension scheme for their employees, they can register for tax relief with HMRC.

If an employer deducts pension contributions from their employees� pay and pay these to a registered pension scheme they may be able to use what is known as a ‘net pay arrangement� to give their employees tax relief on their pension contributions.

If the employer can use a net pay arrangement, tax relief is due on any contributions employees make to the pension scheme (including any additional voluntary contributions).

Assessing NICs

Whether:

• an employer has a net pay arrangement or not, and
• the pension scheme is a registered scheme or not,

NICs must be assessed on the gross earnings before deduction of any pension contributions. »Ê¹ÚÌåÓýappre is no equivalent NICs relief.

Superannuation contributions

Sometimes amounts deducted from employees� earnings are referred to an superannuation contributions.