NIM12021 | Class 1: Calculating Class 1 NICs for Directors: Annual earnings periods for Directors: Introduction

Regulation 8 of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

A director within regulation 8 SSCR 2001 has an annual earnings period (AEP). Whether an annual or pro-rata, see NIM12022, earnings period applies, you must always use it for each payment of earnings. The intervals between payments are irrelevant.

The annual Lower Earnings Limit (LEL) and Upper Earnings Limit (UEL) are calculated by multiplying the weekly LEL and UEL by 52.

There are alternative arrangements for the assessment and payment of NICs for company directors, see NIM12026.