CPPIB Cash in Lieu Allowance Guide

Example: Member A

£300,000 Basic Salary + £150,000 Annual Incentive

On £300,000 Basic Salary

Standard Routine Employer Contribution to Pension

10%

£30,000

On Qualifying Annual Incentive of £150,000

Personal Contribution 0%

£0 Applies for Cash in Lieu Allowance

CIL Allowance

10%

£15,000

Employer Contribution to Pension Pre-deduction monthly CIL Allowance

£10,000

10%

£20,000

Corporate NI (15%) must be paid on a Cash in Lieu allowance

£15,000 ÷ 115% = £13,043.48

CIL Allowance of £10,000 per year (£833.33 per month)

£10,000 (£833.33 per month) added to Pension

‘One off’ £ 13,043.48 added to Member A ’s Pay

Corporate NI (15%) must be paid on a Cash in Lieu allowance

Subject to Income Tax and personal NI in the same way as Salary

£20,000 ÷ 115% = £17,391.30 Annual CIL

£17,391.30 ÷ 12 months = £1,449.27 added to monthly pay

Subject to Income Tax and personal NI in the same way as Salary

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