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HMRC internal manual

National Insurance Manual

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NIM07031 - Class 1 NICs: Payments made under employment legislation: Unfair dismissal: Pay arrears under a re-engagement order: NICs treatment

Sections 111-116 Employment Rights Act 1996

Section 112(3)(a) Social Security Contributions and Benefits Act 1992

Regulation 2(b) Social Security (Contributions) (Employment Protection) Regulations1977

Under the above regulation, arrears of pay made under a re-engagement order are:

  • treated as earnings payable by the person liable to make such payment to the person entitled to receive it
  • to be so payable for the period specified by the employment tribunal.

The gross amount paid under a re-engagement order should be taken into account inassessing the NICs liability.

For details about:

  • what a re-engagement order is, see NIM07030
  • the earnings period to use in calculating the amount of Class 1 NICs, see NIM07060.