Pension contributions and tax relief

Paying into a pension scheme

There is no limit to the amount you can pay into your pension fund.

The maximum tax relief is the lower of:

An excess is calculated if your total income is more than £150,000.

Total income for this purpose is defined in Article 4 of the Income Tax Law. This ignores the total of:

Use our tax calculator to see how this works to reduce you tax.

An individual has total earnings of £180,000 and has deductions for the following	£
Subscriptions	500
Interest payments for main residence	12,000
Lump sum donation to Jersey charity	5,000
Employment pension contributions	14,000
Private pension contributions	30,000
To calculate the pension relief restriction
Total income	180,000
less subscriptions and donation	(5,500)
	174,500
Excess (£174,500 - £150,000) = £24,500
Pension relief is the lower of: £44,000 (actual pension contributions) £25,500 (£50,000 less excess £24,500) £155,000 (relevant earnings £179,500 less excess £24,500) Pension relief = £25,500

An individual has salary or business profits of £100,000 and has investment income of £60,000	£
Pension contributions	50,000
To calculate the pension relief restriction
Total income	160,000
Excess (£160,000 - £150,000) = £10,000
Pension relief is the lower of: £50,000 (actual pension contributions) £40,000 (£50,000 less excess £10,000) £90,000 (relevant earnings £100,000 less excess £10,000) Pension relief = £40,000

An individual has salary or business profits of £150,000 and has investment income of £50,000	£
Pension contributions	50,000
To calculate the pension relief restriction
Total income	200,000
Excess (£200,000 - £150,000) = £50,000
Pension relief is the lower of: £50,000 (actual pension contributions) £0 (£50,000 less excess £50,000) £100,000 (relevant earnings £150,000 less excess £50,000) Pension relief = £0

An individual has salary or business profits of £160,000 and has net property income of £10,000	£
Pension contributions	20,000
To calculate the pension relief restriction
Total income	170,000
Excess (£170,000 - £150,000) = £20,000
Pension relief is the lower of: £20,000 (actual pension contributions) £30,000 (£50,000 less excess £20,000) £140,000 (relevant earnings £160,000 less excess £20,000) Pension relief = £20,000

A married couple, one spouse has salary or business profits of £100,000 and has investment income of £60,000 and the other spouse has salary or business profits of £40,000	£
Spouse A pension contributions	50,000
Spouse B pension contributions	50,000
To calculate the pension relief restriction
Spouse A total income	160,000
Excess (£160,000 - £150,000) = £10,000
Spouse A pension relief is the lower of: £50,000 (actual pension contributions) £40,000 (£50,000 less excess £10,000) £90,000 (relevant earnings £100,000 less excess £10,000) Pension relief = £40,000
Spouse B total income	40,000
Excess = £0
Spouse B pension relief is the lower of: £50,000 (actual pension contributions) £50,000 (£50,000 less excess £0) £40,000 (relevant earnings £40,000 less excess £0) Pension relief = £40,000

An individual has salary or business profits of £25,000 and has a company distribution of £145,000	£
Pension contributions	20,000
To calculate the pension relief restriction
Total income	170,000
Excess (£170,000 - £150,000) = £20,000
Pension relief is the lower of: £20,000 (actual pension contributions) £30,000 (£50,000 less excess £20,000) £5,000 (relevant earnings £25,000 less excess £20,000) Pension relief = £5,000