How might non-cash income be subject to NIC?

Copyright © 2026 LexisNexis
Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

How might non-cash income be subject to NIC?

Copyright © 2026 LexisNexis
Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
imgtext

National insurance (NIC) is due on a person’s earnings from employment, provided that person is not outside the scope of NIC. Examples of this include age or residence status (see the Overview of NIC Classes, rates and thresholds guidance note).

Class 1 NIC

The usual class of NIC that applies to earnings from an employment is Class 1, which has both an employee and an employer contribution. These are collected throughout the year under the PAYE system (see the NIC on cash earnings ― overview guidance note).

Earnings are defined for the purposes of NIC as including 'any remuneration or profit derived from an employment and for the majority of cases, can be taken as having the same meaning as earnings for the purposes of tax, as defined in ITEPA 2003, s 62. See the Tax on cash earnings ― overview guidance note. The interpretation of the definition of earnings for tax purposes from various court cases also applies to the definition of earnings for NIC purposes.

Benefits

Most benefits are specifically

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 14 Jan 2026 07:10

Home/ Tolley Tax Guidance/ Employment Tax / PAYE for employees

Popular Articles

Personal Tax

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more Read more
Personal Tax

Inter-spouse transfer

Inter-spouse transferIntroductionWhen a chargeable asset is transferred between two spouses or civil partners, there is a disposal by the transferor spouse / civil partner and an acquisition by the transferee spouse / civil partner for capital gains tax purposes. For simplicity, spouses and civil

14 Jul 2020 12:01 | Produced by Tolley Read more Read more
Corporation Tax

Taxation of loan relationships

Taxation of loan relationshipsThe vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships.

14 Jul 2020 13:48 | Produced by Tolley Read more Read more