NIM06890 - Class 1 NICs: Employment Related Securities (ERS): Internationally Mobile Employees (IMEs): calculating daily earnings

Paragraph 18(2) of Part 9 of Schedule 3 Social Security (Contributions) Regulations (SSCR) 2001 (As inserted by The Social Security (Miscellaneous Amendments No. 2) Part 1, Regulation 21(3) 2015 / Statutory Instruments 2015 No. 478)

Paragraph 18(2) of Part 9 of Schedule 3 SSCR 2001 provides the calculation for determining the amount of employment income under Chapters 2 to 5 of Part 7 of ITEPA 2003 as having been paid in equal instalments on each day of the “relevant period”.

As defined in accordance with section 41G of Chapter 5B of Part 2 ITEPA 2003, the “relevant period”:

  • begins on the day of acquisition (award/grant); and
  • ends on the day of the chargeable event (vest).

Example

  • ERS awarded/granted on 1 January 2013
  • ERS vest on 31 December 2015
  • Total No. of days in relevant period = 1095 (1 January 2013 - 31 December 2015)
  • Total amount of employment income from ERS = £1,000,000.00
  • Amount of equal instalment paid on each day = £913.24 (£1m/1095 days)