But here's the important bit: we don't calculate this on your entire salary.
Understanding "Pensionable Earnings"
Your pension contributions are worked out on what's called your "pensionable earnings" - this is the portion of your weekly gross pay between £120 and £967 per week, or £520 and £4189 per month.
In practice this means that the maximum amount of earnings subject to pension deduction is £847 a week (£967 - £120) or £3669 per month (£4189 - £520).
For example,
| Your Weekly Gross Earnings | £650 per week | £1,000 per week |
| £650 is greater than £120, but less than £847 | £1,000 is greater than £847, over the max banding. | |
| Pensionable Earnings | £650 - £120 = £530 | £847 |
| Employee Contribution | £530 x 5% = £26.50 | £847 x 5% = £42.32 |
| Employer Contribution | £530 x 3% = £15.90 | £847 x 3% = £25.41 |
Want to save more?
If you'd like to boost your pension savings beyond the standard contributions, you can make Additional Voluntary Contributions (AVCs). These are:
- Employee-only contributions (Nasa doesn't match these, but you still get tax relief!)
- Applied to your full gross earnings (not just the pensionable earnings band)
- Flexible - you can start, stop, or change the amount when you need to
AVCs are a great way to supercharge your retirement savings, especially if you're earning above the £967 weekly threshold and want to make the most of the tax benefits. You can read more about AVCs here.
Questions?
Need help working out your specific contributions or want to set up AVCs? Just get in touch with our Payroll team at payroll@nasagroup.co.uk or use our WebChat in the bottom right corner of this page - they're always happy to run through the numbers with you.