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Earnings paid to a new employee are liable to National Insurance contributions by reference to the normal earnings period, even if the first payment relates to a shorter period (eg where a monthly-paid employee joined halfway through the month, the earnings period is the full month)¹. By the same token where the employee joins half way through one calendar month (the first earnings period) but is not paid until the end of the following month (the first full month of employment, but the second earnings period) the payment is treated as relating to two separate earnings periods of one month each.

Example

A takes up employment with B on 12 May. He is paid monthly at the end of the month, but does not in fact receive his first payment until 30 June. The payment then made must be divided for National Insurance purposes into two, the first relating to the period ended 31 May (the first earnings period) and the second to the month of June (the second earnings