You must tell us about contributions every month on your combined employer return.
As an employer you must pay the primary and secondary contributions for all employees who:
Some employees may have elected not to pay primary contributions. They'll be in possession of a card marked XR1 (red card). Employers are still liable to pay secondary contributions of 6.5%.
The spouse or civil partner of the company or business owner must not be included on the schedule.
If the employee reaches the threshold then you must pay the primary and secondary contributions. The threshold that you use is determined by the frequency that you pay your employee.
Employers are required to pay primary and secondary Social Security contributions for any employees with wages at, or above, the minimum earnings threshold for the wage period.
The threshold depends on the normal wage period for the employee. For example:
For employees paid every 2 weeks, the threshold will be twice the weekly threshold.
For employees paid every 4 weeks it will be 4 times the weekly threshold.
Changes to the minimum earnings threshold
The thresholds will be calculated by Government and published for the following January.
New combined employer return information
Online returns
The best way to complete your combined employer return is online.
Any information you enter is stored, available for reference and will pre-populate your next return.
Register for online returns
When to send in your contribution return
Employer schedules must be submitted monthly on a combined employer return.
The submission deadline for all employers is 15 days following the end of the month in respect of the information that is required.
Gross earnings
Gross earnings are earnings paid to an employee before any deductions are made.
A Social Security pay period is the same as a calendar month.
The earnings should be declared for the month in which they were paid, not earned.
Table showing items not to include in an employee's gross wages
Table showing items to include in an employee's gross wages
How to show holiday pay on a contribution schedule
Many employers pay their employees holiday pay before the normal pay day.
For example: a weekly paid employee is taking two weeks holiday at the beginning of August.
Their wages are £250 per week.
You pay them £750 wages in the last week of July. The normal week’s wage plus 2 weeks for the August holidays.
Month
| Actual amount paid |
|---|
| July | £1000 + £500 (two weeks holiday pay) |
| August | £500 |
In this example, 2 weeks wages would normally have been paid in August.
So you have to treat those 2 weeks salary as if you had actually paid them in August.
You should complete the schedule as follows:
| Month | Amount to be shown on the schedule |
|---|
| July | £1000 |
| August | £1000 |
You deduct Social Security contributions as if the wages were paid at the normal time.
Employees receiving pay after they left your employment
Any wages paid to someone after they have left, must be treated as if it had been paid in the month they left.
If the payment is one that should be included in gross earnings, Social Security contributions are due and payable.
If you haven’t sent in your combined employer return yet
If the return for the month hasn’t been submitted, add the extra pay to that already paid and show the total on the return.
If the total earnings are above the monthly earnings ceiling, only deduct contributions up to the ceiling.
If you have already sent in your combined employer return
If the return for the month has already been submitted, you'll need to send a replacement return for the month, showing the correct pay.
Calculating contributions when the income exceeds the standard earnings limit
| Original earnings | £4,000
|
|---|
Calculated primary contribution
| £240
|
|---|
Calculated secondary contribution
| £260
|
|---|
Additional pay
| £1,500
|
|---|
New total pay
| £5,500
|
|---|
2023 monthly earnings ceiling
| £5,060
|
|---|
Amended primary contributions (6% up to £5,060)
| £303.60
|
|---|
Amended secondary contributions (6.5% up to £5,060 and 2.5% on £440)
| £328.90 + £11 = £339.90
|
|---|
How to show Social Security benefit deductions on the combined employer return
This only applies to you if you continue to pay employees the normal wage during illness and the employee gives you the value of the Social Security benefit they receive.
It’s important to adjust the wages on the return in the month the employee was ill.
For each day that we pay benefit, a credit is put on the employee’s account.
These credits protect the employee’s Social Security record against the loss of earnings.
It may be necessary for you to adjust the contributions deducted in a month after the illness if there is a delay in the employee being ill and you being given the Social Security benefit.
Adjusting the earnings
An employee is ill for ten days in August and you continue to pay their normal wage.
They give you the value of the Social Security benefit in September after you have submitted the August return.
Their normal wages are £1,500 per month and the value of the benefit is £254.30
| Month | Wages | Social Security benefit
| How the wages should be shown on the replacement return
|
|---|
| August | £1,500 | minus £254.30
| £1,245
|
You'll have adjusted the employee’s wages and contributions in September.
On the return you must show the adjustment as if it had been made in the month of illness.
Your wage records will be different from the return, make a note in your records that this is due to the Social Security benefit.
Unusual pay practices that reduce or avoid contributions
Employees are usually paid on a weekly or monthly basis, however there may be occasions when this practice is not followed.
We can recalculate the contributions due for all employees back to when the unusual pay practice started. The contributions will be calculated as if a normal pay practice had been followed.
Calculation of contributions
Calculating the correct deduction
We have an
online contributions calculator if you need help to calculate an employee's correct contribution.
You can learn more about how contributions are calculated below.
The contribution month
The earnings should be declared for the month in which they were paid, not earned.
When a payment of wages (normally made in one month) is paid in a different month, it should be treated as being paid at the normal time.
Weekly paid employees
Social Security contributions are deducted in 25 pence steps for weekly paid employees.
This means that you should round the earnings down to £0.00, £0.25, £0.50 or £0.75 before working out the contributions.
For example:
| Earnings | Rounded down to |
|---|
| £249.27 | £249.25 |
| £329.98 | £329.75 |
| £179.69 | £179.50 |
Keeping a running total of weekly paid wages
Legally you must keep a running total of wages paid to an employee in a calendar month.
Also, primary contributions are only payable on earnings up to the monthly earnings ceiling. Secondary contributions are payable at 6.5% up to the monthly earnings ceiling and then 2.5% charged between the monthly earnings ceiling and the upper earnings ceiling.
If a weekly paid employee receives earnings of more than the monthly earnings ceiling, the contributions must be adjusted.
In this example, it is assumed that the monthly earnings ceiling is £5,060.
| Contribution month one |
|---|
| Week number | Earnings this week | Earnings this month |
| 1 | £1,050
| £1,050
|
| 2 | £1,050
| £2,100
|
| 3 | £1,050
| £3,150
|
| 4 | £1,050
| £4,200
|
| 5 | £1,050
| £5,250
|
In week 5, the combined earnings for the month are more than the monthly earnings ceiling by £190 (£5,250 - £5,060 = £190). The final week's salary would have primary contributions of 6% deducted from £860 (£1,050 - £190) and not from £1,050.
Monthly paid employees
Social Security contributions are deducted on round pounds for monthly paid employees.
Always round the earnings down to the nearest whole pound before working out the contributions.
Four-weekly paid employees
Normally there is one four-weekly payment in each month and each payment can be treated as a monthly payment.
Occasionally 2 four-weekly payments fall in the same month, so these payments should be added together to give the monthly payment.
Make sure that contributions aren’t deducted on earnings above the monthly earnings ceiling.
Fortnightly
Usually two, and sometimes three, fortnightly payments will fall in 1 month.
These payments must be combined in a similar way to weekly paid earnings.
Daily
As long as the employee earns the weekly minimum earnings threshold or more in the week, earnings need to be declared for contributions.
Payment of contributions
Payment must be made by day 15 of the following month that the contributions are for. For example October contributions are due by the 15 November.
At the end of each quarter, a statement of account will be sent to you so you can check your payments.
Pay your contributions bill
If you can’t settle the contributions requested against your own accounts, contact us.
Changes in employees’ circumstances
Turning 16
From the first day of the month that an employee turns 16 years old, they must start paying contributions.
If the employee earns the minimum earnings threshold or more, you have to pay contributions for them.
Leaving employment
If you have the employee’s Social Security or registration card, give it back to them.
Enter the date the employee left your employment on the return.
Working past pension age
An employee doesn’t have to pay contributions from the month after they reach pension age.
The employee must exchange their Social Security or registration card for a new registration card.
You must stop deducting 6% from their wages and continue to pay contributions for as long at the employee is working for you.
This means you must continue to put them on the contributions return and pay secondary contributions of 6.5%.
Death
Contributions are required for all wages paid up to and including the date of death.
Wages paid after the death should be ignored when working out what contributions should be paid.
Choosing not to pay contributions
Some people can choose not to pay contributions.
The employee must exchange their current card, marked FR1 (blue card), for a new registration card marked XR1 (red card), once we have approved this.
They'll ask you for their social security registration card if you still hold it.
You’ll need to carry on deducting primary contributions from their wages until they show you a new red registration card marked XR1.
A photocopy of the card should be kept for your records with a copy of their photographic ID.
Never stop deducting contributions on the word of the employee. The registration card is your only authority.
Choosing to start paying contributions
An employee who has made an election not to pay may cancel it at any time.
They must change their social security registration card marked XR1 (red card) for a registration card marked FR1 (blue card).
Do not deduct primary contributions from their wages until they give you the registration card.
Employee with a married woman’s election XR1 (red card) divorces
If a married woman who has a non-paying election becomes divorced, they must start paying contributions from the first of the month following the date of her decree absolute.
The employee must tell us that she is divorced and the date of the decree absolute.
She must also exchange her current card for a new registration card marked FR1 (blue card).
A photocopy of the card should be retained for your records together with a copy of their photographic ID.
What to do if you make a mistake on your contribution return
If you make a mistake on a contribution return
If you realise that a mistake was made after you've submitted your combined employer return, you need to send in a replacement return.
Missing an employee off the return
If you have missed an employee off completely, you must send in a replacement return for the month, including the missing employee.
How to send in pre-2022 contribution information
This information relates to sending in your quarterly employer contributions schedules up to December 2021.
Contribution quarters
A contribution quarter is a 3 month period.
Contribution schedules and payments are collected for the 3 month period at the end of each contribution quarter.
Contribution schedules must be received on or before the 15th day of the month following the end of a quarter.
How to fill in the quarterly schedule
Step 1
Write the Social Security number and name of all your employees on the schedule.
Step 2
When you've worked out the earnings to be shown on the contributions schedule for a particular month, write them on the contributions schedule.
Only put down whole pounds. Don't include pence or the pound sign (£). Write each number in a separate box.
Step 3
Before returning the contribution schedule to us, check the following:
-
all your employees working 8 hours or more per week are shown on the schedule
- the correct earnings are entered for each employee
- employees who have joined you during the quarter have a start date entered
- employees who left you during the quarter have a left date entered
- if you know that an employee has left the Island, that an X is shown in the appropriate column
-
if any of your employer details have changed, enter the new details on the back of the schedule
-
you've filled in the Employer's Declaration
-
you've signed and dated the declaration
- you've not added the spouse or civil partner of the company or business owner
Step 4
Send the contribution schedule to us.
Remember to photocopy the schedule if you want to keep a copy.
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