National Insurance: More than One Job with the Same Employer
Q. An employee has two separate employment contracts with the same employer.  During the day he is a school teacher, and in the evenings he is a lecturer at a college.  We currently calculate NIC on his total earnings.  However, if we were to split his earnings and calculate NICs separately on each job, there would be a considerable saving.  Are we permitted to do this?

A. Where an employee has 2 jobs with the same employer, there is a presumption within the legislation that those earnings will be added together (aggregated) before NICs are calculated.  Regulation 14 of the Social Security (Contributions) Regulations 2001 provides that it is only permissible to calculate NICs separately in each job where it is not ‘reasonably practicable’ for the employer to aggregate the earnings.

HMRC takes a robust line in requiring aggregation unless the employer has strong evidence to support the assertion that it is not ‘reasonably practicable’.  There is extensive discussion on this point at https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim10009.  Each case is looked at on its own particular merits but the following points are likely to be relevant (the list is not exhaustive):

  • Is it a fact, rather than an assumption, that payroll software cannot aggregate earnings?
  • Is the payroll software an outside package, tailored package, provided by an internal IT section or able to be upgraded by internal resources?
  • If the system can be upgraded what are the costs?
  • How many employees are potentially affected?
  • What is the total number of employees on the payroll?
  • Do employees have similar pay periods?
  • Is aggregation a continuing requirement or a one-off consideration because of a particular project or task?
  • What are the amounts of NICs at stake?
  • Has there been a material change in the workforce since the decision not to aggregate was taken?

However, as you have already been aggregating the earnings for NICs you are unlikely to be able to show that it is ‘not reasonably practicable’ to continue to aggregate the earnings and you are correct to continue to calculate NIC on the total earnings.

If you have a tax query, why not contact the Tax Advice Line on 0844 892 2470 to discuss it. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.

Click here to read 'Separate Contracts with Two Companies'

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Tax Advice Team Leader
0844 892 2470


Martin is a team leader on the tax consultancy & advice lines. A former National Insurance Inspector, Martin spent nine years with the Institute of Payroll and Pensions Management (now the Chartered Institute of Payroll Professionals) as Training, Consultancy and Helpline manager, eventually rising to director before joining Croner Taxwise where he is currently Team Leader with the Tax and Consultancy Advice Lines. He has also represented employers on a variety of government consultation committees. Martin is a member of the Association of Taxation Technicians.

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