Earnings Periods: Holiday pay paid in advance or in arrears: ‘Regular interval’ rule (or “Method A”)
Employers can pay holiday pay either in advance or in arrears.
When holiday pay is paid the employer may apply the regular interval rule (orMethod A) so that they treat each weeks pay as paid at the normal timeand calculate NICs separately on each weeks pay using the normal weekly earningsperiod.
However, if the normal payday is in a different tax year, the payment cannot be treated aspaid at the regular interval and the employer must calculate the NICs using the ratescurrent at the time of payment. The employer must not add the payment to any other paymentdue in that tax year.