Employers can pay holiday pay either in advance or in arrears.
When holiday pay is paid the employer may apply the
“regular interval” rule (or “Method A”) so
that they treat each week’s pay as paid at the normal time
and calculate NICs separately on each week’s pay using the
normal weekly earnings period.
However, if the normal payday is in a different tax year, the
payment cannot be treated as paid at the regular interval and the
employer must calculate the NICs using the rates current at the
time of payment. The employer must not add the payment to any other
payment due in that tax year.
