Employer pension contributions from my limited company — how does the corporation tax relief work?

You've heard right — employer pension contributions are one of the most tax-efficient ways to extract value from your company. The contribution is deductible against the company's corporation tax profits, provided it passes the 'wholly and exclusively' test, meaning it must be justifiable as remuneration for your work as a director or employee. The key timing rule is that the payment must actually be made before the company's year end to qualify for relief in that accounting period; accrued but unpaid contributions don't count. Do also watch your annual allowance — currently £60,000 per tax year across all your pension inputs — because breaching it triggers an annual allowance charge on your Self Assessment. The added bonus is that employer contributions attract no employer or employee National Insurance, unlike salary or bonuses, and they're distinct from salary sacrifice, where part of your gross salary is contractually rerouted into the pension rather than paid as a separate employer contribution.