Employment Tax

Examination grants and awards

Produced by Tolley in association with Philip Rutherford
  • 09 Feb 2022 21:19

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Examination grants and awards
  • Introduction
  • Cash awards
  • Salary increases
  • Reporting requirements

Examination grants and awards

Introduction

Following on from the successful completion of a period of study or examination, an employer often rewards their staff with an award or a grant of either a lump sum or a salary increase to reflect a promotion.

Cash awards

Following the abolition of the £8,500 threshold for lower paid employees (from 6 April 2016 onwards) all examination awards are treated as taxable and should be included in payroll and subject to PAYE and Class 1 NIC.

Salary increases

Any increase in salary for whatever reason, including as recognition for passing exams, should be treated as an increase in earnings

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