The government announced that from April 2020 it will be compulsory for the employer to pay NIC on any part of a termination payment above the £30,000 amount.

Termination Payments:

Employee Class 1 NIC is not payable on any part of the termination payment.

Any value below £30,000 is exempt for tax and national insurance. When a payment exceeds £30,000, the value exceeding £30,000 is applicable for Employers NI (Class 1A).


Sporting Testimonials:

Sporting Testimonials which are non-contractual and non-customary, are not subject to tax or NIC up to £100,000. 

Over £100,000 the payment are both subject to tax and NIC.

You can find more information here:


Termination payments and sporting testimonials are new payment types which can be found in 'Company > Additions and Deductions'.

When selecting a termination payment it will automatically set the tax option and un-check all other addition options. Sporting Testimonial will do the same but also check NI. Termination payments have fixed addition options and additional options are un-selectable.

As explained in the specification termination payments and sporting testimonials behave differently depending on the total amount taken for the employee in a given period of time.

Rather than the user handling this behaviour the software will calculate it automatically.


A termination payment is entered for £45,000. 

During Open and Pay, the software will split the payment automatically. £30,000 will be paid tax free and the remaining £15,000 will be calculated with the relevant tax/NI applied.

The payment will not be displayed separately on the payslip.

A little bit about us...

Qtac, a recognised payroll solutions provider in the UK, has been serving businesses for 30 years. Specializing in both payroll software and outsourced payroll services, Qtac caters to small businesses, large corporations, and payroll bureaux. Our software, recognised by HMRC, streamlines the payroll process, featuring RTI submissions, workplace pensions management, and a cloud-based portal for payslips and employee self-service. This software is supported by top-tier customer assistance, ensuring a smooth payroll experience.

Additionally, Qtac offers tailored ‘white-labelled’ outsourcing services. These services are particularly attractive to accountancy firms, as they save time, reduce stress, and mitigate payroll-related risks. By outsourcing to Qtac, companies can be confident in the knowledge that their payroll needs are being expertly managed.

Qtac's solutions are not just about functionality; they are about building long-lasting relationships with clients, offering them a combination of technology and expertise. Their commitment to adapting to client needs and providing reliable, efficient services has established Qtac as a trusted name in the payroll solutions sector in the UK. In essence, Qtac simplifies and enhances the payroll process for a diverse range of clients, ensuring compliance, efficiency, and customer satisfaction. 

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