Lord of the memes

From Wikipedia with the original source being The Python Years. Michael Palin (2006)

In the Monty Python film Life of Brian, there is a scene where Michael Palin (as Pontius Pilate) talks about a friend with the name Biggus Dickus, which causes several extras to crack up. In character and in a long, drawn out fashion, he confronts the extras and dares them to laugh while repeating the name. Palin himself nearly corpses, most obviously when he asks the guard if he finds it 'wisible' when he says the name Biggus Dickus. The extras completely lose composure when he mentions Biggus Dickus' wife's name is Incontinentia Buttocks. Ad-libbing like this was intentional to create an authentic reaction from the extras.

This is from Michael Palins diary and doesn't make any reference to withholding pay from actors and just says the scene had some improvisation in it.

This quote is taken verbatim from an answer to a similar question on Movie's stack exchange, it tells a similar story of the scene being improvised and again makes no reference to the withholding payment for laughing

I have a physical copy of Monty Python's Encyclopythonia; which contains some interviews with the Python members.

It's not that the guards weren't aware of the script. They were. However, when the scene was being shot, one of the actors couldn't help but laugh because of Michael Palin's character. It was just that funny.

Instead of ending the scene, Palin stayed in character and approached the guard; resulting in the scene you are referring to.

However, that does not prove that the guard's reactions (after their initial unintended outburst) were genuine. They could have picked up on the fact that Palin was improvising, and they continued the scene based on how Palin was steering the conversation.

Monty Python is well known for its improvisation. In improv, when you are dealing with more than one actor; all actors need to understand what they are acting out, and will therefore "build a sketch together" on the fly.

Presumably, only the initial laugh was genuine. The rest is simply a continuation of the scene in an improvised manner.

All evidence points to the fact the scene was improvised to an extent by Michael Palin and the extras Chris Langham, Andrew MacLachlan and Bernard McKenna. I could not find a single piece of evidence that even slightly points to the guards being threaten to not be paid.