NIM02365 - Class 1 NICs : Earnings of employees and office holders : Superannuation contributions

If the employer pays superannuation contributions to a fund or scheme authorised by the Pension Schemes Office they are not taxable. In these circumstances the employer would deduct the amount of superannuation contributions from the gross pay before assessing the tax liability and would enter only the ‘net pay’ figure on the Deductions Working Sheet (DWS) for tax purposes.

However, NICs are due on the gross earnings before deduction of the superannuation contributions. The employer must record the gross pay figure on the DWS as earnings on which NICs are payable if the gross pay figure reaches the earnings threshold. (See NIM01008 for information regarding the earnings threshold.)