HMRC National Insurance Guidance for Internationally Mobile Employees
James K Smith · Posted on: November 3rd 2025 · read
In September HMRC published new guidance confirming the UK National Insurance (NIC) position for internationally mobile employees. HMRC indicated the guidance is intended to apply retrospectively, as they consider it to be a clarification of the existing law rather than a change in position. In their view, the guidance reinforces what has always been the correct interpretation.
The big picture
The new guidance clarifies HMRCs view that NIC is determined for internationally mobile employees by where the employee was insured when the income was earned, and it is collected when payment is made.
This means there is an expectation that earnings should be apportioned so that the portion earned while the employee was within UK NIC is subject to contributions.
Importantly, this applies to all employment income, not just irregular pay like bonus. Therefore, this includes salary, allowances and other cash remuneration.
What happened in the past
Before the guidance update, the NIC position wasn’t clearly set out for internationally mobile employees, so practice varied.
- Many employers treated NIC on “trailing” pay by looking only at the position when the payment was made, effectively an all-or-nothing pay-date approach based on which country’s social-security system the employee was under at payment.
- Others apportioned income by the period the earnings were earned (sometimes on an estimated monthly basis). This wasn’t consistently applied or explicitly backed in the manuals, leading to uncertainty and inconsistent outcomes across populations and years.
Complications with the guidance
The guidance clearly sets out this is not just irregular payments (e.g. bonus) but includes regular earnings (e.g. salary and allowances).
There will be examples where the period an employee is subject to UK NIC is different to their UK tax residency position and potentially if they’re liable to UK income tax. Where an employee is travelling to or from a country the U.K. has a social security agreement with or if they are covered by the 52-week rule under U.K. domestic legislation, will only complicate this further.
HMRC make clear that if an internationally mobile employee becomes liable to NIC on 9th March, they should be subject to NIC on the proportion of salary which relates to 9th – 31st March.
This will cause complexities with payroll software where by individuals could have payments which have multiple different NIC and tax treatment in a single month.
The guidance indicates that an employees monthly earnings should be apportioned for when they begin or cease to be liable to UK NIC part-way through a pay period. This will present challenges with payroll systems as in most cases these are not designed to have multiple NIC categories within a single pay run.
Worked examples:
Example 1
Consider an employee who was on assignment to the UK from 1 January 2024 to 30 June 2024 and held a valid A1 meaning they remained within their original home country social security regime for that period. Assume they localised on a UK employment contract and began paying UK NIC from 1 July 2024.
They receive a £60,000 bonus earned from 1 January 2024 to 31 December 2024 which was paid 31 March 2025.
Historically many employers applied UK National Insurance to 100% of the bonus as it was paid when subject to UK NIC. With the new guidance, employers need to first identify the earnings period, then determine the period the employee was within UK NIC.
On these facts, UK National Insurance would be due on £30,000 (6/12), with the remaining £30,000 outside UK National Insurance.
The Issue: Employers will need to proactively track when individuals become subject to UK NIC and ensure that payroll is accurately operated.
Example 2
Taking this further, HMRC provide the following example. An individual comes to work temporarily in the UK from Brazil, a country with which the UK does not have a social security agreement from 8 March 2024. They are paid monthly on the last day of the month. They are exempt from paying NIC for the first 52 weeks in the UK.
The 52-week exemption from paying NIC ends Saturday 8 March 2025 (i.e. from Sunday 9 March 2025 they are liable to NIC).
In the March 2025 pay they will be liable to NIC on all earnings earned from 9 to 31 March 2025 and on all earnings going forward until departing the UK.
The Issue: Payroll software may not be able to have multiple NIC rates in the single pay run. In this case, having a portion of income with no NIC and a portion with NIC.
What employers should
- HMRC have advised they expect employers to revisit their NIC calculations for mobile employees for the past six tax years and to correct any errors via updated RTI submissions. In certain cases, voluntary disclosures may be appropriate.
- Going forward, employers should record, for each plan or payment type, the earning period and the start/stop dates of any coverage, as these form the apportionment key.
- Configure payrolls to calculate the UK-in-scope NIC proportion at payment, withhold primary and secondary Class 1 on that slice, and exclude out-of-scope periods.
How we can help
We can support employers to review prior year NIC apportionments and advise on the payroll corrections required and make disclosures as needed.
Going forward, the UK payroll position for internationally mobile employees has become significantly more complicated. We can support and guide on the correct UK reporting treatment for internationally mobile employees, not only UK NIC but also income tax.
