Tax paid if workplace pension tax relief is combo of at source and via HMRC change to tax code

I have spent many many hours on the phone to HMRC over the last few years trying to get this sorted. I am still getting refunds due to erroneous calculations from 4 years ago, which has dented my confidence that my tax is now correct! What I have been told also differs from the gov.uk take-home pay / tax calculator using the same details. Could someone explain simply and clearly to me what the calculation should be based on these example figures using what HMRC have told me? Gross pay £89,175 Pension contribution 14% Tax Code (to reflect 40% pension tax relief; 20% is added back into the pot by the pension provider): 2037L Allowance £20,370 Taxable pay £68,805 (deduct allowance) Amount at 20% tax: £37,700, so £7,540 Amount at 40% tax: £31,105, so £12,442 - is that correct or should my pension contribution be accounted for / deducted? Total tax £19,982 or £1,665.17 per month

Hi gouldec,
Tax relief at source.
You state your gross pay is £89175 and your taxable pay is £68805, so the difference (£20370) is paid to your pension before your employer calculates your tax liability. This means that your pension payment has received tax relief 'at source' and no further tax relief is due.  Instead of calculating the tax due on your gross pay (£89175), your employer has calculated the tax using the figure (68805) after deducting your pension payment, so you have not had to pay any tax on you £20370 pension payment.  
Tax relief after tax paid.
If tax relief is not given at source, then your are taxed on your gross pay £89175 minus personal allowance £12570, which gives taxable income of £76605.  Of this (£37700+£25462 = £63163) is taxable at 20% and £13442 is taxable at 40%, making the tax payable £18009.40.  Your pension provider claims 20% relief from HMRC on £20370, so that you get 20% relief throught the pension scheme and 20% being taxed at basic rate and not higher rate.
With method 1, you pay less tax but only pay £20370 to your penson. With option 2 you pay more tax, but pay £25462 into your pension. This is made up of £20370 (80%) plus £5092 (20%) or (£20370/80*100 = £25462) claimed from HMRC by your pension provider.
Thank you.

Thank you for replying, I very much appreciate it. However, my current situation is that tax relief is not given at source - my pension provider claims back 20% tax relief and I have had to claim the extra 20% (as a 40% tax rate payer) by regularly phoning or writing to HMRC. My allowance has been increased to £20,370 to account for this situation, presumably so that I don't have to keep ringing up to get it checked? My pension contribution is 14%, so that's £1040.38/month or £12,484.56/year. What I am trying to do is to make sure I'm not paying too much tax and have to claim it back again. So, my question is: is the amount of tax I am paying this year likely to be correct, given these details? Shouldn't tax relief at source vs after tax paid end up with me being in the same situation in relation to my pension and tax? And why is my tax code set at 2037? Thank you!

Hi,
We can only provide general advice in this forum.  
For an answer to a personal question of this nature, you will need to contact our PAYE helpline on 0300 200 3300 or contact our webchat facility at Contact HMRC
Thank you.