CPPIB Cash in Lieu Allowance Guide
Example: Member B
£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 TAA Cash in Lieu Allowance Employer Contribution to Pension £10,000 Pre-deduction monthly CIL Allowance 10% £20,000
CIL Allowance
10%
£15,000
Corporate NI (13.8%) must be paid on a Cash in Lieu allowance
£15,000 ÷ 113.8% = £13,181.02
CIL Allowance of £10,000 per year (£833.33 per month)
£10,000 (£833.33 per month) added to Pension
‘One off’ £ 13,181.02 added to Member B’s Pay
Corporate NI (13.8%) must be paid on a Cash in Lieu allowance
Subject to Income Tax and personal NI in the same way as Salary
£20,000 ÷ 113.8% = £17,574.69 Annual CIL
£17,574.69 ÷ 12 months = £1,464.55 added to monthly pay
Subject to Income Tax and personal NI in the same way as Salary
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