PPLNS is a way of determining how many Altcoins for your shares completed. Pay Per Last N Shares is what PPLNS stands for. This method of calculating payouts includes a "luck" factor. Using PPLNS your payout per share will have a large range (30% more or less on your payouts), but on average, PPLNS earns more than PPS (by 5% or so) in the long run (a month or more).

  • PPLNS Formula
((Block Value + Transaction Fees) / 10) - Pool Fee (3%)

BTCguild explanation of PPLNS

Pay Per Last N Shares groups shares submitted by all users into a "shift." A shift is currently defined as ~250 million shares. Once a shift is completed, it is considered an "Open Shift". After 10 new shifts have completed, the oldest open shift is closed.

While a shift is open, any blocks the pool finds are paid out to all open shifts (10% of the block per shift). This means that you will continue receiving payments on completed (open) shifts even if you stop mining.