There are a wide variety of possible payments to be made by an employer under employment protection legislation. Before looking at any NIC earnings period on the payment, the starting point will be establish if PAYE tax and/or Class 1 NIC is actually due on the payment.
NIC treatment of employment protection payments including tribunal awards—general
The PAYE tax and NIC treatment of payments made under an employment tribunal award is not always straightforward1. For example:
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•ÌýÌýÌýÌý The payment may be made to reflect or ensure the continuation of the employment, in which case it will almost certainly be subject to PAYE tax and NIC in full.
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•ÌýÌýÌýÌý Although the employment may have ceased, the payment may be part of an order of reinstatement, re-engagement or continuation. Here it is possible the payment will be subject to the £30,000 termination payment tax exemption but, in this scenario, HMRC takes the view that Class 1 NIC is due in full.
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•ÌýÌýÌýÌý The typical
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Web page updated on 17 Mar 2025 16:29