NIM07061 | Class 1 NICs: Payments made under employment legislation: Earnings period to be used in assessing NICs liability: Payments made under a reinstatement order, a re-engagement order or an order for the continuation of a contract of employment

Regulation 5(a) Social Security (Contributions) Regulations 2001

As mentioned in NIM07060, a payment made under:

• a reinstatement order (see NIM07020 – NIM07021);

• a re-engagement order (see NIM07030 – NIM07031);

• an order for the continuation of a contract of employment (see NIM07040 onwards);

has its own specific earnings period.

The earnings period to be used in assessing the amount of NICs on a payment made under any of the orders mentioned above is the longer of:

• the period to which the sum relates; or

• a week.

Example

Employer A makes a payment under a reinstatement order to employee A. The payment is for the period 6 April 2025 to 31 May 2025 ie, 56 days. As this period is longer than a week, the length of the earnings period is 56 days.

For information on how to calculate the value of the:

• lower earnings limit

• upper earnings limit

• earnings thresholds

for the length of earnings period shown in the above example, see NIM01010.