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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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NIM02065 - Class 1 NICs : Earnings of employees and office holders : Arrears of pay

Any arrears of pay, for example a backdated pay increase, must be added to any other earnings received by the employee in the pay period under consideration and NICs assessed on the total amount.


In a particular month an employee who is regularly monthly paid receives :

  Normal earnings £1800
  Arrears of pay £1000
  Total £2800

NICs must be assessed on the total of £2800 using the monthly lower earnings limit (LEL), earnings threshold and monthly upper earnings limit (UEL). See NIM01000.