NIM08400 - Earnings Periods: Payments after the employment has ended: Regular pattern of payments

Regulation 3(5) of the Social Security (Contribuutions) Regulations 2001 (SI 2001 No 1004)

If there is a regular pattern of payments after the employment has ended (usually, this will mirror the pattern which existed prior to termination of the employment) that pattern will dictate the earnings period in the normal way, see NIM08020 onwards.

Example

If a monthly paid employee leaves the job during a particular month and receives their final earnings payment at the end of that month, NICs on those earnings are still calculated on a monthly basis and is subject to a monthly earnings period.

The same principle applies to any payments made after the employment has ended that can be regarded as forming part of the normal salary, eg overtime which is paid a month in arrears. For example, a person who is paid on the last day of the month leaves their employment on the 31 August. As overtime is paid in arrears the employee does not receive their final payment of overtime until the 30th September. The payment of overtime is subject to a monthly earnings period.