Expenses and benefits: lost-time payments

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1. Overview

As an employer, you have certain tax, National Insurance and reporting obligations if you make lost-time payments to employees who attend third-party events.

What’s included

Events covered by lost-time payments include:

  • trade union meetings
  • meetings of public bodies
  • jury service

2. What's exempt

If the lost-time payment only replaces an employee’s lost earnings, you don’t have to report anything to HMRC or pay tax and National Insurance.

Jury service

You don’t have to pay staff while they’re doing jury service, but many employers do.

If you don’t pay them, they can claim a loss of earnings allowance from the court.

3. What to report and pay

If the lost-time payment is more than an employee’s lost earnings, you must:

  • add this extra amount to your employee’s earnings
  • deduct and pay Class 1 National Insurance and PAYE tax through payroll

4. Technical guidance

The following guides contain more detailed information: