I'm putting a lot of my monthly income into a pension.
I'm not on furlough yet but it's highly likely I will be from 1st April.
I'm over the government cap so [hopefully] should receive the £2.5K from my employer. I don't think they will add 20% to this (although it's yet to be seen).
Is the 2.5K taxed please?
If I recall correctly it also includes employers NI in that 2.5K
There may come a point when I need to lower my pension commitment as the amount I "receive" may not be sufficient to cover the pension payment.
AiYn'U
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Furlough Payments - Are They Taxed?
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- Lemon Half
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Re: Furlough Payments - Are They Taxed?
Yes, I think you should receive just under £2k, after tax and NI
John
John
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- Lemon Half
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Re: Furlough Payments - Are They Taxed?
There are some calculations and useful commentary undertaken by Chris at Legal Issues:
viewtopic.php?p=294587#p294587
viewtopic.php?p=294587#p294587
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- Lemon Half
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Re: Furlough Payments - Are They Taxed?
AsleepInYorkshire wrote:Is the 2.5K taxed please?
"While on furlough, the employee’s wage will be subject to usual income tax and other deductions.
:
Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme."
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
AsleepInYorkshire wrote:If I recall correctly it also includes employers NI in that 2.5K
"Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage." Ibid.
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