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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
Updated
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The benefits code: whether an employment has earnings of less than £8,500 a year: the effect of changes in rates of pay during the year

 

This section only applies for 2015/16 and earlier.

When working out whether an employment has earnings of less than £8,500 a year (EIM20101) and consequently whether or not it is an excluded employment (EIM20007):

  • if an employment continues throughout the year, take all the earnings for the whole year into account in accordance with EIM20101 onwards,
  • if the employment is for part of the year only see EIM20111,
  • if the employee is employed part-time, only include the earnings actually received. Do not try to ‘gross up’ to a full-time rate,
  • if the earnings total £8,500 or more the employment is subject to the full benefits code (EIM20006) for the whole year,
  • if the earnings total less than £8,500 the employment is an excluded employment for the whole of that year.
  • Never contend that, where an employee’s pay varies from month to month, he is within the full benefits code for the months in which he is paid at a rate exceeding £8,500 a year, and in an excluded employment (EIM20007) for the others.