PART 6CALCULATION OF CAPITAL AND INCOME
C1CHAPTER 2EARNED INCOME
C1Employed earnings55
1
This regulation applies for the purposes of calculating earned income from employment under a contract of service or in an office including elective office (“employed earnings”).
2
Employed earnings comprise any amounts that are general earnings as defined in section 7(3) of the ITEPA but excluding—
a
amounts that are treated as earnings under Chapters 2 to 11 of Part 3 of that Act (employment income: earnings and benefit etc treated as income), and
b
amounts that are exempt from income tax under Part 4 of that Act (employment income: exemptions).
3
In the calculation of employed earnings the following are to be disregarded—
a
expenses that are allowed to be deducted under Chapter 2 of Part 5 of the ITEPA (employment income: deductions allowed from earnings), and
b
expenses arising from participation as a service user (see regulation 52(2)).
4
The following benefits are to be treated as employed earnings—
a
statutory sick pay;
b
statutory maternity pay;
c
statutory paternity pay;
d
statutory adoption pay; F1...
e
statutory shared parental pay F3; and
F2f
statutory parental bereavement pay.
5
A repayment of income tax or national insurance contributions received by a claimant from HMRC in respect of a tax year in which the person was in paid work is to be treated as employed earnings unless it is taken into account as self-employed earnings under regulation 57(3).
6
In calculating the amount of a person's employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)—
a
any relievable pension contributions made by the person in that period,
b
any amounts paid by the person in that period in respect of the employment by way of income tax or primary Class 1 contributions under section 6(1) of the Contributions and Benefits Act, and
c
any sums withheld as donations to an approved scheme under Part 12 of the ITEPA (payroll giving) by a person required to make deductions or repayments of income tax under the PAYE Regulations.
7
Employed earnings also comprise any payment made under the legislation of, or under any scheme operating in, the Republic of Ireland which is analogous to any income to which paragraph (2) relates.
Pt. 6 Ch. 2 applied (coming into force in accordance with reg. 1(3) of the amending Rule) by The Social Security (Payments on Account of Benefit) Regulations (Northern Ireland) 2016 (S.R. 2016/223), regs. 1(3)(h), 13(7)