Jurisdiction(s):
United Kingdom

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Key definition

Earnings definition

What does Earnings mean? In corporate and finance practice, earnings means the profit attributable to ordinary shareholders for a reporting period. It is the company’s profit after tax, after finance costs (including interest paid to bondholders) and after any preference dividends. Earnings are commonly shown on a per‑share basis as earnings per share (EPS): profit attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the period. Example: £2 million earnings and 10 million shares gives EPS of 20p. Earnings is a descriptive accounting and market term, not a statutory one. For listed companies in the...

Non-cash employment income and benefits-in-kind: UK taxation under section 62 and the benefits code, exemptions (including trivial benefits), optional remuneration, PAYE and NICs

Published by a LexisNexis Tax expert

Practice notes

In addition to cash pay, such as wages or salaries, many remuneration packages also contain non-cash elements, for example the provision of a car, health insurance or childcare. An employer may likewise settle particular costs on behalf of the employee, for instance a home landline, or utility bills. These non-cash earnings are commonly described as benefits-in-kind, or simply benefits.

Non-cash earnings can be brought into charge to income tax on employment income under a range of provisions, including:

the charge on earnings in section 62 of Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003)—if the benefit constitutes money's worth;
specific provisions in ITEPA 2003, Part 7 relating to the provision of employment-related securities and securities options (see Practice Note: Employment-related securities—overview and the related Practice Notes);
the disguised remuneration provisions in ITEPA 2003, Part 7A—which should be considered particularly if the non-cash earnings are provided through a third party rather than the employer, and
the benefits code in ITEPA 2003, Part 3.

The charge on earnings in ITEPA 2003, s 62 will generally take precedence over other possible charges to income tax on employment income...

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Web page updated on 21/05/2026

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