Health and WellbeingRewards & 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

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

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.”

Comments are closed.

What's Hot

Establishing an Organization Guidance System

Strategy & Leadership Establishing an Organization Guidance System

4m Dave Ulrich
2020: HRD Thought Leaders on the biggest trends of the year to come

Strategy & Leadership 2020: HRD Thought Leaders on the biggest trends of the year to come

5m Michael Hocking
HRD Summit UK 2020 - Sneak Peek

HRD Summit UK HRD Summit UK 2020 - Sneak Peek

5m Joe Talora
Amanda Cusdin, Sage: The Big Conversation and real cultural transformation

HRD Live Podcasts Amanda Cusdin, Sage: The Big Conversation and real cultural transformation

5m Michael Hocking
HRD Best of 2019: Culture and Engagement

Engagement HRD Best of 2019: Culture and Engagement

5m Michael Hocking
Do You Possess the Top Two Most In-Demand Skills?

Learning & Development Do You Possess the Top Two Most In-Demand Skills?

4m Jill Christensen