Yes, the £40,000 limit applies to both employer and employee pension contributions. Therefore, the total gross contributions should not exceed £40,000. The employee will need to adjust their contributions to factor in the employer contributions. As an example, for someone with a salary of £100,000 and an employer contribution of 3% gross (£3,000), the employee can contribute a further £37,000 gross (37%).
Does the tax relief limit apply to both employer and employee contributions?
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