As a company, the amount paid is a business expense, which could reduce the taxable profits and therefore, lower the corporation tax liability.

Employer contributions are paid in addition to any salary, but do not attract national insurance for the company or employee. Plus, employees don’t pay income tax on the contribution, making it a tax efficient way to reward loyal employees.

You can opt to pay pension contributions by salary sacrifice, where employees exchangetaxable salary for higher pension contributions from the company. As the taxable salary is reduced, both employer and employee save on National Insurance, plus the employee saveson income tax, while increasing the amount of pension expense for the company to offset against its profits.

Whatever arrangement you come to with your employees, the contributions must comply with the auto enrolment minimums of at least 8% of salary with the company paying at least 3%.

Interested to know how this can help your business, contact the awesome team at Artema to find our how.