Company Pension Contributions
Employer pension contributions paid directly from your company. They save corporation tax, avoid employer NI, and incur no personal income tax — one of the most tax-efficient extraction methods.
How It Works
Your limited company makes a pension contribution directly to your SIPP or workplace pension. The contribution is a deductible business expense. Unlike salary, no employer NI is payable. You pay no personal tax. The £60,000 annual allowance is shared with personal contributions.
Tax Treatment
The contribution is a deductible business expense (saves corp tax). No employer NI payable (saves 15%). No income tax or employee NI for the director. Growth is tax-free. 25% tax-free lump sum from age 57.
Tax Advantages
- Corporation tax deduction at 19-25%
- No employer NI payable (saves 15% vs salary)
- No income tax for the director
- No employee NI for the director
- Tax-free growth within the pension
Who Is This Suitable For?
All company directors and business owners. Should typically be prioritised after optimal salary. Combined tax saving can be 40%+ of the contribution.
Related Calculators
Frequently Asked Questions
How much can my company contribute?▾
Up to £60,000 per year (shared with personal contributions). You can carry forward unused allowance from the previous 3 years for potentially over £200,000 in one year.
Better than a dividend?▾
Usually yes for long-term savings. A £10,000 contribution saves ~£2,500 in corp tax and ~£1,500 in employer NI. The trade-off is money is locked until age 57.
Can I use carry forward?▾
Yes. Unused annual allowance from the previous 3 years can be carried forward, allowing very large contributions in a single year.