In its October 2025 Employer Bulletin, HMRC expanded its guidance to help employers determine when National Insurance contributions (NICs) are due on earnings paid to internationally mobile employees. The update clarifies that NIC liability depends on when the work was performed, not when payment is made, and introduces practical examples and apportionment rules to ensure accurate treatment of deferred or cross-border remuneration.
Who is covered
The guidance applies to employees who are “internationally mobile” — for example those who:
- live in the UK but work overseas;
- come from overseas to work in the UK;
- move in and out of the UK to work (UK or overseas residents);
- work in several countries and have an employer based overseas.
When NIC is due
The central principle: if the employee was liable for UK NIC at the time the work was carried out (i.e. during the period the earnings were earned), then NIC is due on those earnings — even if payment is made later, when the employee is abroad.
Conversely: if the employee was not liable for UK NIC during the period when the work was carried out, then there is no liability to pay NIC when the payment is eventually made.
HMRC confirms that the “all or nothing” approach (i.e., determine liability solely at date of payment) is incorrect. Instead, an apportionment approach is required: the liability should reflect the period the employee was within the UK NIC charge and the period outside it.
What employers must do now
We set out below a summary of the key action points which employers need to carry-out in respect of their internationally mobile employees.
- Determine liabilityEmployers must check whether the employee was liable to UK NIC during the earnings-period (not just on payment). That means considering when the work was done, where the employee was working/insured, and whether the UK social-security rules applied.
- You can check how to calculate National insurance for employees working abroad and new employees coming to work from abroad, or refer to examples in the NIM33000 section of the National Insurance Manual (NIM).
- Apply an appropriate calculation Where the period of earnings spans both UK liability and non-UK liability, the NIC deduction must be apportioned accordingly. The review must include salary, bonuses (especially those earned partly while the employee was UK-liable and partly while they were abroad), share awards and RSUs.
- Update payroll processesEmployers may need to adapt payroll software or manual procedures to track the “earnings period” and apply appropriate NIC deductions, including for deferred remuneration or bonuses paid after an assignment has been concluded or the employee has left the UK.
Historical correction and record-keeping
We recommend that employers review their payroll records for the last six years to identify any past overpayments or underpayments of NIC for internationally mobile employees, including those employees who may started to work overseas under extended hybrid working arrangements.
Corrections should be made via the Real Time Information (RTI) payroll system where possible, and employers must retain supporting evidence, such as:
- A record of the employees, with their National Insurance numbers,
- The total amount and description of relevant earnings,
- Periods when earnings were paid and when they were earned,
- Amounts of employee and employer Class 1 NIC already paid and now considered correct,
- The amount of National Insurance contributions now due to be paid or refunded
- Explanation of how the error occurred.
If an RTI amendment is not possible, employers should follow HMRC’s guidance on refunds or voluntary disclosures (using references like ‘NICs refund for Internationally Mobile Employees’ or ‘NICs Disclosure for Internationally Mobile Employees’).
Why this matters
HMRC’s latest statement restates their longstanding view on how NIC liabilities apply to mobile employees. It brings more certainty but also imposes administrative challenges for employers, particularly where payments are made after the employee’s UK liability period has ended.
Employers may face underpayment liabilities (if NIC was not deducted when it should have been) or overpayment exposures (if NIC was deducted when it was not required).
There are potential complexities around double social security charges (i.e., UK NIC and foreign contributions) when the apportionment approach is applied which employers need to consider when dealing with globally mobile staff.
How we can help
The Employment taxes team can help you review your globally mobile employees, especially your current working practices.
