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HMRC internal manual

National Insurance Manual

Class 1 NICs : Earnings of employees and office holders : Retirement or dismissal

Include in gross pay lump sum payments made on retirement or in the event of dismissalunless they can be accepted as a pension payment or compensation. For details of payments:

  • made on termination of employment, see NIM02500
  • by way of a pension made:



  • before 6th April 2006, see NIM02285
  • on or after 6th April 2006, see NIM02700 (contents).

Do not include redundancy payments as these are specifically excluded from earnings forNICs purposes by virtue of regulation 25 and paragraph 6 of Part 10 of Schedule 3 to theSocial Security (Contributions) Regulations 2001.