NIM07062 | Class 1 NICs: Payments made under employment legislation: Earnings period to be used in assessing NICs liability: Payments made under a protective award

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

As mentioned in NIM07060, a payment made under a protective award (see NIM07050 onwards) has its own specific earnings period.

The earnings period to be used in assessing the amount of NICs on a payment made under a protective award is the longer of:

• the protected period (see NIM07050); or

• that part of the protected period in respect of which the amount is paid; or

• a week.

Example

Employer BBBB makes a payment under a protective award to employee B. The payment is for the period 6 April to 31 May (56 days). The protected period (as decided by the employment tribunal – see NIM07050) runs from 9 March to 31 May (84 days).

As the longest period is the length of the protected period, the length of the earnings period is 84 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.