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Regulations 3(1)(a) & 7(3) Social Security (Contributions) Regulations 2001

The principle outlined in NIM08310 applies. For example, if an employee starts work in March but does not receive their first payment of earnings until April (covering the March and April earnings periods), work out NICs on the earnings for each period separately. However, because Regulation 7(3) does not allow us to treat earnings paid in one tax year as paid in another, NICs must be calculated on the payment due for March using the later year鈥檚 contribution rates and limits.

Example:

• an employee starts work on 22 March 2025
• the employee has a monthly earnings period (earnings are paid on the last day of each calendar month)
• the employee is liable to standard catergory A NICs
• it is too late for the employer to put the employee on to the payroll for March so the employee receives their first earnings payment, for the period 22 March to 30 April, on 30 April 2025.

The employee鈥檚 gross pay is 拢4,000聽which represents:

• 拢1,000 for the period 22 to 31 March
• 拢3,000 for the period 1 to 30 April

NICs are calculated on each sum separately as follows (2025 to 2026 tax year):

• monthly Secondary Threshold (ST) = 拢417
• monthly Lower Eanings Limit (LEL) = 拢542
• monthly Primary Threshold (PT) = 拢1048
• monthly Upper Earnings Limit (UEL) = 拢4189

Earnings payment for March = 拢1,000

• Employee NICs = Earnings below PT = 拢0.00
• Employer NICs = 拢583 x 15% = 拢87.45
• Total NICs = 拢87.45

Earnings payment for April = 拢3,000

• Employee NICs = 拢1,952聽x 8% = 拢156.16
• Employer NICs = 拢2,583聽x 15% = 拢387.45
• Total NICs = 拢543.61

Both sets of NICs are recorded on the employee鈥檚 record for the 2025 to 2026 tax year.

This principle also applies to weekly paid employees.

Note

See also NIM09800 regarding re-allocation of contributions for benefit purposes.