Why Pensionable Pay Matters for Dentists
Your NHS pensionable pay is the earnings figure used to calculate both your pension contributions and the benefits you build up in the scheme. Get it wrong and you could overpay contributions, underpay benefits, or trigger an unexpected tax charge.
For UK dentists, the definition of pensionable pay is not straightforward. It depends on whether you are an associate, a principal, a salaried dentist, or a locum. It also depends on which section of the NHS Pension Scheme you belong to (1995, 2008, or 2015 CARE).
This article explains what counts as pensionable pay for each type of dentist in 2025/26, what does not count, and how to check your records.
What Is NHS Pensionable Pay?
NHS pensionable pay is the earnings on which you pay pension contributions and on which your future pension benefits are calculated. It is not the same as your total income from dentistry.
The NHS Pension Scheme defines pensionable pay as earnings from NHS work that are subject to the scheme's rules. Private dental income is never pensionable. Neither are certain NHS payments that fall outside the scheme's definition.
For the 2015 CARE scheme (the current section for most dentists under 50), pensionable pay in each scheme year builds up a pension at a rate of 1/54th of that year's earnings. For the 1995 and 2008 sections, pensionable pay in the final year (or best of the last three years) determines the final pension.
Pensionable Pay for Different Dentist Roles
Salaried Dentists (Foundation Dentists, Community Dentists, Salaried Associates)
If you are employed on a salaried contract with an NHS trust, health board, or a practice that pays you via PAYE, your pensionable pay is straightforward. It is your gross salary, including:
- Basic salary
- London weighting or other location allowances
- On-call and out-of-hours payments
- Performance-related pay (if contractual)
It does not include:
- Expenses or mileage allowances
- Employer pension contributions (these are not part of your pay)
- Non-NHS work (private treatment, teaching, consultancy)
Self-Employed Associates (GDS/PDS Contract Holders)
This is where most confusion arises. Self-employed associates working under a General Dental Services (GDS) or Personal Dental Services (PDS) contract do not have a simple salary figure. Their pensionable pay is the NHS fee income they earn from NHS treatment, minus certain deductions.
Specifically, for a self-employed associate, pensionable pay includes:
- Gross UDA earnings (the total value of UDAs completed, before any practice deduction)
- Seniority pay (if applicable)
- NHS maternity, paternity, or adoption leave pay (paid by NHS England)
- NHS sick pay (if you qualify)
It does not include:
- Private fee income (even if treated in the same surgery)
- Lab fees, materials, or other expenses you pay personally (these are not deducted from pensionable pay for self-employed associates)
- Practice charges or rent (these are not deducted either)
- Employer pension contributions (you have none as self-employed)
This point is critical. Many associates assume their pensionable pay is the net amount they take home after the practice takes its percentage. It is not. Your pensionable pay is the gross NHS fee income attributable to you, before any practice deduction.
Practice Principals (Owners and Partners)
For practice owners, pensionable pay is the profit from NHS work that you draw from the practice. This is more complex than for associates.
If you are a sole trader or partnership principal, your pensionable pay is the NHS element of your practice profit, after deducting allowable expenses. You must apportion your total profit between NHS and private work, typically using a ratio based on UDA value versus private fee income.
If you trade through a limited company, pensionable pay is the salary you draw from the company that relates to NHS work. Dividends are not pensionable. Company pension contributions from the practice are not part of your pensionable pay (they are an employer contribution).
Seniority pay for principals is pensionable. It is paid by NHS England and counts as pensionable earnings in the scheme year it is received.
Locum Dentists
Locum dentists working NHS sessions can build pensionable pay, but only if the engaging practice or health board processes the pension contributions correctly. Many locums do not realise they can opt into the NHS Pension Scheme for locum work.
If you are a locum working through a limited company (PSC), your pensionable pay is the NHS fee income you earn, not the salary you pay yourself from the company. The practice or health board should report your gross locum fees to NHS Pensions. If they do not, you may miss out on pensionable service.
For locums working via an agency on a PAYE basis, pensionable pay is your gross PAYE earnings from NHS locum sessions.
Seniority Pay and Pensionable Pay
Seniority pay is a long-service payment for NHS dentists who have completed a qualifying period of NHS service. It is paid by NHS England and is fully pensionable.
Seniority pay is calculated based on your NHS service history and is paid as a lump sum or monthly addition. It counts as pensionable earnings in the scheme year it is paid, not the year it relates to. This can cause timing mismatches if you change practices or retire mid-year.
Seniority pay is being phased out for dentists in the 2015 CARE scheme. New entrants to the 2015 scheme after 1 April 2015 do not qualify. Existing members retain their accrued rights under McCloud remedy provisions.
What Does NOT Count as Pensionable Pay?
Several common income streams are not pensionable, even if they come from NHS work:
- Private fee income, never pensionable, regardless of where it is earned
- Expense reimbursements, travel, mileage, accommodation, course fees
- Employer pension contributions, these are not your pay
- Dividends, not pensionable for company-owner dentists
- Capital gains, from selling a practice or shares
- Non-NHS work, teaching, lecturing, expert witness work, private consultancy
- Practice sale proceeds, even if you continue working at the practice
Common Mistakes Dentists Make with Pensionable Pay
Mistake 1: Using Net Income Instead of Gross NHS Fees
Self-employed associates often report their pensionable pay as the net amount after the practice takes its percentage. This understates your pensionable earnings and reduces your future pension. Always use the gross NHS fee income attributable to you.
Mistake 2: Ignoring Seniority Pay
Seniority pay is pensionable but many dentists forget to include it in their annual pensionable pay figure. Check your NHS Pensions annual benefit statement to see if seniority pay is included.
Mistake 3: Mixing Private and NHS Earnings
If you do mixed NHS and private work, you must apportion your practice profit correctly. Using a simple 50/50 split without evidence can lead to HMRC and NHS Pensions queries. Keep clear records of UDA completions versus private treatment income.
Mistake 4: Locum Pension Contributions Not Being Reported
Locum dentists who work through a limited company must ensure the engaging practice or health board reports their NHS locum fees to NHS Pensions. If they do not, you get no pensionable service for that work. Ask for a pension schedule with each locum invoice.
How to Check Your Pensionable Pay
You can check your pensionable pay for each scheme year on your NHS Pensions Annual Benefit Statement. This is usually issued in the summer following the end of the scheme year (31 March).
If the figure on your statement does not match your records, contact NHS Pensions or your practice's pension administrator. Discrepancies can be corrected, but only within a limited time window (usually within 12 months of the scheme year end).
For self-employed associates, ask your practice for a breakdown of the gross NHS fees attributed to you each month. Keep copies of your UDA completion reports and payment schedules.
Tax Implications of Pensionable Pay
Your pensionable pay determines your pension contribution rate, which is tiered based on your total NHS pensionable earnings. For 2025/26, contribution rates range from 5.1% to 14.5% depending on your band.
If your total NHS pensionable pay exceeds the annual allowance (£60,000 for 2025/26) or the lifetime allowance (abolished from 6 April 2024, but transitional protections remain), you may face a tax charge. The tapered annual allowance applies to dentists with adjusted income over £260,000.
Seniority pay can push you over the annual allowance in a single year, especially if you receive a large backdated payment. Plan ahead with your accountant.
Practical Steps for Dentists
- Know your role. Your pensionable pay definition depends on whether you are salaried, self-employed associate, principal, or locum.
- Check your annual benefit statement. Compare it to your records. Discrepancies cost you future pension.
- Keep separate records for NHS and private work. This is essential for principals and mixed-practice associates.
- Include seniority pay. It is pensionable and often overlooked.
- For locums: Confirm with each practice that your NHS locum fees are being reported to NHS Pensions.
- Speak to a dental-specialist accountant. Pensionable pay interacts with tax, incorporation, and practice sale planning. A generalist accountant may miss the nuances.
For more detail on how the NHS Pension Scheme works for dentists, see our NHS Pension Scheme Essentials for Dentists guide. If you are an associate trying to understand your take-home pay after pension contributions, use our Associate Take-Home Calculator.
For principals, understanding pensionable pay is part of broader practice accounting. And if you are a locum dentist, our locum dentist tax services can help you structure your pension contributions correctly.