Meaning of “pensionable pay”5

1

An employee’s pensionable pay is the total of–

a

all the salary, wages, fees and other payments paid to the employee for his or her own use in respect of the employee’s employment; and

b

any other payment or benefit specified in the employee’s contract of employment as being a pensionable emolument.

2

But an employee’s pensionable pay does not include–

a

payments for non-contractual overtime;

b

any travelling, subsistence or other allowance paid in respect of expenses incurred in relation to the employment;

c

any payment in consideration of loss of holidays;

d

any payment in lieu of notice to terminate the employee’s contract of employment; or

e

any payment as an inducement not to terminate the employee’s employment before the payment is made.

3

No sum may be taken into account in calculating pensionable pay unless income tax liability has been determined on it.