HomeTalent ManagementRewards & BenefitsReward and RecognitionBudget 2016: Employers hit with £500m bill for NICs on pay-offs

Budget 2016: Employers hit with £500m bill for NICs on pay-offs

  • 1 Min Read

Employers will pay National Insurance Contributions (NICs) on pay-offs where income tax is also due from April 2018.

Featured Image

Employers will pay National Insurance Contributions (NICs) on pay-offs over £30,000 from April 2018.

It is expected to cost employers almost £500m a year by 2020-21, and a total of £1.4bn over the next five years.

The move was announced by chancellor George Osborne as part of his Budget speech and will apply to termination payments and other similar payments where income tax is already payable.

Treasury confirmed that for people who lose their job, payments up to £30,000 will remain tax-free and they will not need to pay NICs on any of the payment.

Osborne said: “We’ll tighten rules around the use of termination payments. Termination payments over £30,000 are already subject to income tax. From 2018, they will also attract employer national insurance.”

Was this article helpful?

Subscribe to get your daily business insights

Related Articles

How investing in your people is the key to business growth

Employee recognition is not just a feel-good gesture; it is a strategic business tool that can drive employee engagement, retention, and...

  • Rachael King
  • May 5, 2023

From theory to practice: Maximizing employee engagement through meaningful recognition

In my last article for HRD Connect, I wrote about how to transform managers into champions of employee recognition by helping them understand why...

  • Debra Corey
  • Jan 31, 2023

Creating meaningful recognition to drive connections and loyalty

Over the years, companies have come to understand the importance and power of employee recognition - to our people and to our companies. Let’s...

  • Debra Corey
  • Jun 22, 2022

Are performance reviews telling us what we need to know?

Performance reviews used to be a yearly event where employees would get feedback on their work. However, this model is outdated and doesn't reflect...

  • Vlatka Ariaana Hlupic
  • Jun 20, 2022

5 ways to eliminate your appreciation gap

Over the years, employee recognition has moved from a ‘nice to have’ to a ‘have to have,’ with 87 percent of organisations now having some...

  • Debra Corey
  • Mar 8, 2022

Virtual Summit roundup: Saint-Gobain on employee rewards and recognition

Rewards and recognition is a key pillar of HR strategy, touching on all aspects of business operations, ranging from digital transformation (how...

  • Fin Murphy
  • Dec 1, 2020

Workplace benefits – what’s beyond pay, pensions and annual leave?

Free fruit, an onsite gym, employee discounts… There are a growing number of workplace benefits that employers are now having to...

  • Dale Critchley
  • Jul 8, 2019

Bringing positivity to a changing workforce: Bruce Daisley, VP at Twitter

Bruce Daisley, Vice President at Twitter spoke exclusively at the HRD Summit UK about the importance of happiness at work, and what companies can...

  • Louron Pratt
  • Feb 20, 2019

Events

HRD Roundtable: Combating 'Quiet Quitting'…

08 June 2023
  • E-Book
  • May 12, 2023

HRD Network Roundtable: The Retention…

15 June 2023
  • E-Book
  • May 12, 2023

Manage change and drive value…

01 June 2023
  • E-Book
  • May 12, 2023
Sign up to our Newsletter