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Tony Tax, Tax Consultant
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Question The definition of net relevant earnings (NRE) for

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Question: The definition of 'net relevant earnings' (NRE) for personal pension payment purposes. Ignoring the issue of the new maximum contributions and what happens if income/contributions are over the basic tax rate, I understand you obtain full tax relief at your highest marginal rate on pension contributions of up to 100% of your net relevant earnings (essentially your gross taxable earnings). However, my income is made up of a salary of under 6K (i.e. within the personal allowance so not taxable) and dividends. Does NRE cover such untaxed income and/or can I count dividend income as NRE?

Net relevant earnings does not include interest or dividends, just salary or profits if you are self-employed. Dividends might save you national insurance contributions but they can't be pensioned.

Let me know if you have any queries.
Customer: replied 5 years ago.
Thanks - to confirm, that means NRE covers even an untaxed salary? (point taken re: NI...)
NRE covers earnings (taxed or not) whether they are in the form of salary, bonuses, benefits in kind etc for employees and profits for the self-employed.
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