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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