NIM08410 - Earnings Periods: Payments after the employment has ended: Irregular pattern of payments

Regulations 3(5) & (6) of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

If there is an irregular pattern of payments after the employment has ended, a weekly earnings period will come into force. For example, NICs are calculated on a weekly basis if a former employee, who used to be paid monthly, receives some irregular payments as shown below:

• a bonus (payment made 11 weeks after the employment has ended); and
• arrears of pay following a pay award (payment made 7 months after the employment has ended).

Prior to 6 April 2016 there were special rules when employees were in contracted out employment.

NICs were due at the contracted-out rate on earnings paid up to 6 weeks after the employment ended and at the not-contracted out on earnings paid more than 6 weeks after the employment ended.

Example

A Person leaves their contracted-out employment and recieves a bonus payment 11 weeks after the employment has ended. NICs will be due on the bonus at the not contracted-out rate and the earnings period will be a week.