NIM10013 - Aggregation of Earnings: Calculating NICs: Earnings periods: Where contracted-out employment may apply

Regulation 6 of the Social Security Contributions Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Where a person has more than one employment and for tax years before 6 April 2016 one or more of those employments was contracted out did not affect the earnings period that was to be applied to calculate NICs due.

NICs are calculated based on the shortest earnings period between the employments.

Example 1

If a person has two jobs both contracted out into the same pension scheme and one job has a monthly earnings period and the other a weekly earnings period, the earnings period for NICs purposes is a week.

Example 2

If a person has two jobs neither of which is contracted out and one job has a monthly earnings period and the other a weekly earnings period, the earnings period for NICs purposes is a week.

Example 3

If a person has two jobs both of which are contracted-out into different pension schemes and one job has a monthly earnings period and the other a weekly earnings period, the earnings period for NICs purposes is a week.

The rules are different for which earnings periods to apply where the person has an Appropriate Personal Pension (APP) see NIM10016 to NIM10018