Make your bonus stretch further
We all like getting value for money. Discover how you can get even more out of your annual bonus by using it to boost your retirement savings.
Ready to boost your savings?
Great! All you need to do is fill in a form by 1st March. We'll do the rest once your bonus is paid in March. Want to know a bit more before deciding? Take a look at the highlights below. We've also included some payslip examples so you can get a feel for how you can get more out of your bonus.
Extra contribution – bonus formGive me the highlights:
- You can pay some or all of your annual bonus into the DC Plan as an extra contribution – whatever suits you. This’ll boost your retirement savings for when you’re no longer working. But there’s an immediate win too…
- Because you don’t pay tax on any extra contributions you make to the DC Plan, more money is invested for you. And there’s an extra benefit if your bonus will take you into a higher tax bracket – paying some or all of it into the DC Plan will help to reduce your income tax bill. The benefits don’t stop there...
- Your extra contributions will be made automatically through salary sacrifice (unless you tell ITV Pensions otherwise). So, you won’t pay National Insurance on any bonus you pay as an extra contribution into the DC Plan.
Here's a summary:
| If your bonus is paid through payroll |
If your bonus is paid as an extra contribution into the DC Plan | |
|---|---|---|
| Income tax | You pay income tax on your bonus | You don't pay income tax on the bonus you pay into the DC Plan |
| National Insurance | You pay National Insurance on your bonus | You don't pay National Insurance on the bonus you pay into the DC Plan |
Take a look at these payslip examples to see how it works:
We’ve based this example on someone with a basic salary of £30,000 a year.
Here’s what a payslip for a normal month might look like.
Payments:
Salary: £2,500.00
Total: £2,500.00
Deductions:
Tax (1257L): £290.20
NIC: £145.20
Total: £435.40
Net: £2,064.60
Here’s what it might look like if you got a £1,000 bonus paid through payroll. Compared to a normal month, you’d end up with £700 more after tax and NI.
Payments:
Salary: £2,500.00
Bonus: £1,000.00
Total: £3,500.00
Deductions:
Tax (1257L): £490.20
NIC: £245.20
Total: £735.40
Net: £2,764.60
Let’s say you pay £500 from your bonus into the DC Plan. Compared to a normal month, you’d make an overall gain of £850 (£350 increase in pay, plus £500 paid into the DC Plan for you).
Payments:
Salary: £2,500.00
Extra contribution: -£500.00
Bonus: £1,000.00
Total: £3,000.00
Deductions:
Tax (1257L): £390.20
NIC: £195.20
Total: £585.40
Net: £2,414.60
These are examples only. The actual calculations will depend on your bonus, how much you decide to pay into the DC Plan, your salary, tax code, NI rate and the amount of your core contribution to the DC Plan.
Other things to know:
- You need to tell us how much of your bonus you’d like to use to make an extra contribution by 1st March.
- Because of the payroll cut-off date, you won’t know how much your bonus will be before you tell us how much you’d like to pay. So, you may prefer to select to pay a % of your bonus rather than a monetary amount.
- ITV Pensions can help you work out the maximum you can pay but they won’t know how much your actual bonus will be.
- Your bonus will be deducted from your pay in March and paid into the DC Plan.
- You decide how to invest your extra contribution from the range of options available (see Investing for details).
Need some help?
ITV Pensions can answer your questions and help you complete the extra contribution – bonus form. Get in touch by calling 01772 884488 or emailing enquiries@itv-pensions.com
Monday to Thursday 8.30am to 5pm, Friday 8.30am to 4pm.
