NIM07031 - Class 1 NICs: Payments made under employment legislation: Unfair dismissal: Pay arrears under a re-engagement order: NICs treatment

Sections 111-116 Employment Rights Act 1996

Section 112(3)(a) Social Security Contributions and 51²è¹Ý Act 1992

Regulation 2(b) Social Security (Contributions) (Employment Protection) Regulations 1977

Under the above regulation, arrears of pay made under a re-engagement order are:

  • treated as earnings payable by the person liable to make such payment to the person entitled to receive it
  • to be so payable for the period specified by the employment tribunal.

The gross amount paid under a re-engagement order should be taken into account in assessing the NICs liability.

For details about:

  • what a re-engagement order is, see NIM07030
  • the earnings period to use in calculating the amount of Class 1 NICs, see NIM07060.