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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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Earnings Periods: Payments after the employment has ended: Regular pattern of payments

Regulation 3(5), SS(C)R 2001

If there is a regular pattern of payments after the employment has ended (usually, thiswill mirror the pattern which existed prior to termination of the employment) that patternwill dictate the earnings period in the normal way, see NIM08020 etseq.

Example

If a monthly paid employee leaves the job during a particular month and receives theirfinal earnings payment at the end of that month, NICs on those earnings are stillcalculated on a monthly basis.

If the employment was contracted-out:

  • contracted-out NICs are due on earnings paid up to 6 weeks after the employment has ended;
  • not contracted-out NICs are due on earnings paid more than 6 weeks after the employment has ended.
  • The same principle applies to any payments made after the employment has ended that can be regarded as forming part of the normal salary, eg overtime which is paid a month in arrears.
  • For example, a person who is paid on the last day of the month leaves their employment on the 31 August. As overtime is paid in arrears the employee does not receive their final payment of overtime until the 30th September. The payment of overtime is subject to a monthly earnings period.