If one of your employees changes their gender, you need to tell HM Revenue and Customs (HMRC) and make sure the employee’s paying the right National Insurance.

What to report to HMRC

Once your employee tells you they plan to change gender, you can update your payroll records with their new gender and any changes to their title and name.

If you need to update both your employee’s name and gender, you must report these changes in separate Full Payment Submissions (FPS). If you don’t, HMRC may create duplicate payroll records and your PAYE bill may be higher than it should be.

Once your employee has given you a copy of their new birth certificate, you should check if their change of gender affects their National Insurance. You should also photocopy the certificate for your records and give your employee the original.

Employees over State Pension age

You need to amend your employee’s National Insurance deductions if changing gender affects whether they should receive State Pension.

State Pension age can be between 61 and 68, depending when someone was born and if they’re male or female.

Calculate your employee’s State Pension age.

Employee qualifies for State Pension after becoming female

If your employee can claim State Pension after becoming female, update their payroll records so they stop paying National Insurance.

Employee stops qualifying for State Pension after becoming male

If your employee can’t claim State Pension any more after becoming male:

  • change their National Insurance category letter from ‘C’ to ‘D’ if they’re in your company’s contracted-out pension scheme - or to ‘A’ if they’re not
  • start deducting National Insurance from their pay

Employee paying reduced National Insurance contributions becomes male

Until 1977, married women could choose to pay less National Insurance. Women who opted in before the scheme ended can continue to pay at a reduced rate.

If an employee who opted in becomes male, change their National Insurance category letter from ‘E’ to ‘D’ if they’re in your company’s contracted-out scheme - or from ‘B’ to ‘A’ if they’re not. Work out their National Insurance using the new letter on all following payments.