For owner-managed limited companies, employer pension contributions are usually the cheapest way to extract retained profit. Salary is subject to NI; dividends face dividend tax. Employer pension goes in gross, saves corporation tax, and bypasses both. The calculator shows the tax saving, the real cost to your company, and how the pension stacks up against simply taking the same money as dividend.
Salary + dividends + employer pension contributions. Used to calculate tapered annual allowance above £260,000.
Pension money is locked until age 55 (rising to 57 in 2028). 25% can be taken tax-free at retirement; the rest is taxed as income.