For PRSI purposes, any overtime, commission, BIK (see
paragraph 13 for more information on benefit-in-kind) or bonus is treated as pay at the date of payment, regardless of the period over which the employee earns it or to which it relates. The same rule applies to arrears of pay and other retrospective adjustments. So, payments made in the current tax year for periods of work in a previous year are subject to a PRSI contribution in the current income tax year.
The contribution class that applies to payments of this type is the class that applies at the time the payment is made, not the class that applied at the time covered by the payment.
However, if you make a payment to an employee
after they leave their employment, the employee must also make a PRSI contribution. The
contribution class that applies in this case is the class that applied to the former employment. The
rate of contribution that applies is the rate appropriate to that contribution class in the year you make the payment (see
paragraph 47 for information on recording insurable weeks).