NIM08100 - Earnings Periods: Employee has no regular earnings period

Regulation 4 of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Where an employee has no regular pay interval, their earnings period should be determined in accordance with the following rules:-

Whenever the employment is one in which services are rendered on one or more occasion, and

• on each occasion the services are rendered within a fixed period but in the employee’s own time and his own convenience, and
• the earnings are paid by reference to the services rendered on each occasion

the earnings period is the length of the fixed period or a week, whichever is the longer.

Example

If an engineer is engaged under a contract of service for 8 weeks to repair the machinery of a company and is allowed to work as and when he likes and he is paid for the services rendered in that fixed period, the earnings period is 8 weeks. This would still apply even if they completed the job in say, 7 weeks.

Where the foregoing does not apply, the earnings period is normally the length of the period of that part of the employment for which the earnings are paid or a week whichever is the longer.

Example

If, periodically, a person is required by an employer to do a fortnight’s work with earnings being paid at the end of each engagement, the earnings period is 2 weeks provided that the spells of employment (and therefore the payments of earnings) do not fall into a regular pattern. Similarly, if a person works for an employer for one day only but on a different day each week and the earnings are paid at the end of each day on which services are rendered, the earnings period is a week. If, exceptionally, services were rendered on, say, 2 occasions, in the same tax week, the 2 payments of earnings would fall to be aggregated - see NIM10000.

Where it is not reasonably practicable to determine the earnings period as in the above paragraph , it should be taken as the length of the period from the date of the last preceding payment of earnings in respect of the employment (or, if there has been no such payment, from the date on which the employment began) to the date of the particular payment (or, where that date is after the end of the employment, the date on which the employment ended). Where the period so calculated is less than a week, the earnings period is a week.

Example

If during a period of continuous employment earnings are paid at irregular intervals, the earnings period is determined by the interval between each payment. If the interval between one particular payment and the next is 10 days, the earnings period is 10 days. To arrive at the lower and upper earnings limits the employer should divide each weekly limit by 7 and multiply the results by the number of days (Sundays included) in the period. To arrive at the Secondary Threshold (ST) and Primary Threshold (PT) the employer should divide the yearly figure by 365 and multiply the result by the number of days in the period. Contributions are then payable, or treated as payable, on the earnings in each interval if they exceed the relevant assessed threshold – see NIM01000.