NIM08510 - Earnings Periods: Change of earnings period with the same employer: Change to longer interval

Regulation 18 of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

If an employee’s regular earnings period changes to a longer interval, for example weekly to monthly paid, work out the NICs on payments made after the change using the new interval. If an employer has made a payment at the old shorter interval in the first of the new longer periods take that payment and the NICs worked out on it into account when working out NICs for the new period as a whole.

Example

A weekly paid employee changes to monthly paid, getting their last two weekly payments on the 4th and 11th of the month. Their new earnings period is a tax month which always starts on the 6th of every month. All earnings paid in the same earnings period normally have to be added together. The employer should work out NICs on the first monthly payment taking into account the earnings and NICs on the payment made on the 11th, so that the total NICs payable are the same as if the two payments had been added together and monthly NICs worked out. The weekly payment made on the 4th is not in the new earnings period and is not affected.