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What we count as earnings

What are net earnings?

This is what is left after the deduction of:

  • income tax
  • class 1 national insurance contributions
  • regular contributions paid into a company pension scheme

We do not class the following as earnings:

  • amounts paid by a public department of the Government of Northern Ireland or any country outside the UK
  • any social security pension, allowance or benefit
  • tax credits
  • any pension or allowance paid for disability
  • guaranteed minimum pension within the Social Security Pensions Act 1975
  • statutory maternity pay
  • statutory paternity pay
  • statutory adoption pay
  • statutory redundancy pay

A deduction from earnings can only be made from the following types of earnings:

  • wages and salary, fees, bonus, commission, overtime pay or any payment on top of wages and salary under a contract of services
  • private or occupational pensions and compensation payments for loss or reduction of earnings
  • statutory sick pay
  • contractual sick pay
  • contractual maternity pay
  • contractual redundancy pay

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