Tier 2 and pension

[Khaled33]

Can tier 2 holders take pension and other benefits from their employer if this is meant to reduce the taxed gross of their income to a level lower than the threshold of their role as such benefits are not all taxed ? The payslip still show their base salary is above the threshold though as it combines both the taxed and untaxed salary?

[Frontier Mole]

Your gross before tax salary must be greater or equal to your COS and the COS salary has to be greater or equal to the rate for the role / SOC.

If your gross salary is being reduced for benefits in kind then you are not earning the stated salary.

[Khaled33]

Thank you for your reply

I am actually earning the required salary and it’s guaranteed and also shown in each payslip. it’s just that I chose to sacrifice part of it for pension and other benefits which have tax relief on them . Is that an issue ?

[Frontier Mole]

No issue at all

[Khaled33]

Thank you
Is that ok even though the total gross will drop to below than the minimum salary requirements for my role when pension and benefits are deducted? So if I choose from tomorrow to get off these benefits and pension I can do that I can then get full salary as per CoS which is above minimum threshold of my role . My p60 for that year will show less than the threshold of my role salary due to tax relief on pension and benefits as p60 only reflects taxed gross . What do you think?

[Frontier Mole]

If the gross amount does not meet the requirements then it will fail... I think you are failing to understand the tax system.

Your gross is your gross end of... if deductions are made from salary they are indicated after the gross amount. If these deductions are tax free or have allowances due to whatever use they are being applied, the gross amount before deductions is still the amount declared to HMRC.

If deductions are made in advance (actually that makes it tax fraud) and then your adjusted figure becomes your stated gross salary you will have issues on two fronts- HMRC and the Home Office.

[Khaled33]

That’s correct! The total amount is still declared to hmrc in full however ,only the amount that’s paid tax on is reflected on p60.

Do you expect any amount that has tax relief to be reflected on p60?