Do Employees pay National Insurance on Severance Payments?
Hi. I am receiving a voluntary severance payment on the termination of my employment. The severance payment has £30k tax free and anything over that is taxable. My question is about whether that amount of £30k requires employee National Insurance contributions to be paid. The HMRC website says Employer Class 1A NIC must be paid on the amount over £30k but my question is, does the employee also have to pay NI as well on this part? The severance payment is NOT made up of Payment in-lieu of Notice (PILON) or restrictive covenant. It’s a severance payment that “includes any entitlement to statutory redundancy pay plus additional element. The payment will be made around 3 weeks after my employment finishes. Thanks very much for any advice.
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