# How do I calculate my pension contribution for automatic enrolment at 5%?

For context:

• My annual gross salary is `£55,000`, which makes it around `£4583.33` gross per month (`£55,000 / 12 = £4583.33`).
• I have been auto-enrolled onto my workplace's pension scheme and my contribution is 5%.
• My workplace contributes the other 3%

My workplace uses NEST for processing pension contributions.

When I checked, it mentioned that NEST uses 'relief at source', meaning my contributions are calculated based on my net pay but I don't seem to see any evidence of this. Perhaps I am getting confused at how this is calculated. My net salary after tax & student loans is (excluding pension stated on payslip): `£3205.86`

I recently double checked my payslip from work and noticed that they have my pension contribution as `£146.76`.
But when I use the pension regulator website's calculator, for the annual salary of `£55,000`, I can see that the amount I should pay is: `£183.46`.

This happens to be that `£183.46 - 20% = £146.76`. So is my contribution correct? Or should I be paying `£183.46` in total like the calculator suggests?

I know for sure that there are no other fees involved when my pension contribution is sent to NEST so I'm not sure which value should be correct?

The only way I can make sense of this is if I use the following calculation

Tax year of 22-23:

Gross Salary: `£4583.33`
Qualifying Earnings: `£4583.33`

Qualifying Earnings Lower Threshold (monthly 2022/2023): `£520`
Qualifying Earnings Upper Threshold (monthly 2022/2023): `£4,189`

Earnings on which pension is calculated:
`£4,189 (Earning over Qualifying Earnings Upper Threshold ignored) - £520.00 = £3,669.00`

Therefore my pension contribution is calculated as:
`£3,669.00 * 5% = £183.45`

Applying basic tax relief, that comes to:
`£183.45 - 20% = £146.76`
Which is what it states on my payslip.

Also, compared with the values from the pensions regulator website: https://www.thepensionsregulator.gov.uk/employers/work-out-your-automatic-enrolment-costs

This works out the same (being `£183.45`).

But I thought I should be contributing `£183.45` into my pension, not `£146.76`, because as far as I understand, 20% of `£183.45` is more than 20% of `£146.76`. Or is that the incorrect assumption to make here? I don't fully understand how this 'relief at source' works, if it says it works on my net pay.

The way I understand it, I pay `£146.76` and NEST adds 20%. But `£146.76 + 20%` is not `£183.45`.