The NTP timescale is based on UTC (Coordinated Universal Time) which is a global civil timescale that is based on International Atomic Time (TAI) but accounts for the slowing of the Earth’s spin by intermittingly adding ‘leap seconds.’
This is done to ensure that UTC is kept in coincidence with GMT (Greenwich Meantime, often referred to as UT1). Failing to account for the Earth’s slowing in its rotation (and occasional speeding up) would mean that UTC would fall out of synchronisation with GMT and noon, when the sun is traditionally the highest in the sky would drift. In fact if leap seconds were not added eventually noon would fall at midnight and vice versa (albeit in several millennia).
Not everybody is happy with leap seconds, there are those that feel that adding of seconds to keep the Earth’s rotation and UTC inline is nothing but a fudge. However, failing to do so would make such things as astronomical observations impossible as astronomers need to know the exact positioning of the stellar bodies and farmers are pretty reliant on the Earth’s rotation too.
The NTP clock represents time in a totally different way to the way humans perceive time. Instead of formatting time into minutes, hours, days, months and years, NTP uses a continuous number that represents the number of seconds that have past since 0h 1 January 1900. This is known as the prime epoch.
The seconds counted from the prime epoch continue to rise but wraps around every 136 years. The first wrap-around will take place in 2036, 136 years since the prime epoch. To deal with this NTP will utilise an era integer, so when the seconds reset to zero, the integer 1 will represent the first era and negative integers represent the eras before the prime epoch.
Time servers that receive their time from the GPS system are not in fact receiving UTC, primarily because the GPS network was in development before the first leap second but they are based on TAI. However, GPS time is converted to UTC by the GPS time server.
The radio transmission broadcast from national physics laboratories such as MSF, DCF or WWVB are all based on UTC and so the time servers do not need to do any conversion.