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.

Example

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

Description	Amounts
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.