How does company pension affect the payslip?
May 1, 2023 | 40,00 EUR | answered by Christiane Rapp
Dear tax advisor,
My name is Marcus Strauss and I work for a medium-sized company. Recently, my employer has given me the opportunity to set up a company pension scheme. However, I am unsure about how this decision will impact my salary slip.
Currently, I earn a gross monthly salary of 3,000 euros and receive a net salary of approximately 2,200 euros after deduction of taxes and social security contributions. I have heard that contributions to a company pension scheme are exempt from taxes and social security. Does this mean that my net salary will increase if I opt for a company pension scheme? Or are there other factors that I should consider?
I am concerned that my financial situation could worsen due to the company pension scheme or that I may end up with less money available. Are there any disadvantages that I should be aware of?
Can you explain to me how a company pension scheme will specifically affect my salary slip and if there are ways to optimize these effects? I would like to make an informed decision and I am grateful for your assistance.
Thank you in advance.
Kind regards,
Marcus Strauss
Dear Mr. Strauss,
Thank you for your inquiry regarding company pension schemes and their impact on your payroll. It is understandable that you are concerned about your financial situation and want to make an informed decision. I would be happy to explain to you how the company pension scheme will affect your payroll.
If you opt for a company pension scheme, you can benefit from tax and social security-free contributions. This means that the contributions to the company pension scheme will not be included in the calculation of income tax and social security contributions. As a result, your net salary may increase as fewer deductions will be made from your gross salary.
However, it is important to note that the contributions to the company pension scheme will be taxed upon payout. This means that while you benefit from tax advantages during the contribution phase, you will have to expect taxation of pension payments upon withdrawal. It is advisable to inform yourself early on about the tax aspects and the level of taxation later on.
Another important point to consider is the flexibility in choosing investment forms and contribution amounts. Depending on the provider and tariff, you can use various options to optimize your company pension scheme. It is advisable to seek comprehensive advice and evaluate the different options in order to find the best solution for you.
In summary, it can be said that opting for a company pension scheme can be beneficial as you can benefit from tax advantages and plan for the future. However, it is important to consider all aspects and gather information in order to make an informed decision.
I hope that I could assist you with this information and I am available for any further questions you may have. Thank you for your trust and I wish you success in your decision-making process.
Best regards,
Christiane Rapp
