How to set up employer pension contributions

It’s possible for your employer to make your work pension contributions, including your own contributions, your employer’s contributions and tax relief, to your Self-Invested Personal Pension, rather than into your main workplace scheme.

• The first step is to ask if your employer will consider this.
• If your employer agrees, you need to first have a SIPP set up.
• You would then need to fill out the employer contributions form.
• Your employer will need your personal pension account details to arrange the payments.
• You may need to separately cancel any existing contributions to your main workplace scheme. 

The amount of your own contribution and your employer’s contribution is usually detailed on your payslip.

With employer contributions to an ii SIPP, depending on whether the amounts and payment frequencies are fixed or vary, your employer can set-up a direct debit, use individual bank transfers or a combination of these. 

For more information about how to complete and return the ii SIPP contributions form to set up employer contributions, please read:

• Arranging a single employer contribution to your SIPP by bank transfer
• Arranging monthly employer contributions to your SIPP by Direct Debit

Tax relief

If your employer scheme is a ‘net pay’ pension scheme or salary sacrifice, all of your tax relief, including higher and additional rate relief, should be included in your employer contribution.

If your employer’s scheme is a ‘relief at source’ scheme, you will have your basic rate tax relief added automatically to your SIPP. If you are a higher or additional rate taxpayer, you will need to claim your additional tax relief via your self-assessment tax return.

Check what type of pension scheme your employer operates.

Any personal contributions you make to your personal pension alongside your employer’s contributions will receive tax relief at the basic rate. Higher and additional rate taxpayers will still need to fill out self-assessment tax returns to claim their extra tax relief, even if the tax relief from the work part of the pension contributions is added by the employer.