Payroll Week 53, 54 or 56

Why you might have an extra period of payroll, and what do if you have

If your pay date (the date the employees receive the money not when you run the payroll) is 6th April or later - this is a week 1, week 2, week 4 or month 1 payroll.

If you run a weekly, 2-weekly or 4-weekly payroll you might find you need to complete an additional period after week 52 to finish your PAYE PAYE or Pay as you earn is an HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment. tax year.

If your normal repeating pay date falls on the 5th April you have to complete the additional period for your tax year to be complete.

When it is a leap year, an additional period appears if your pay date falls on the 4th April.

Any money an employee earned in the previous tax year is processed in the new tax year, even if the pay date is in the new tax year.

The additional period is:

If your normal repeating pay date does not fall on either the 4th (leap year only) or 5th of April, your last period is week 52.

Monthly payrolls are never affected. You would never process a month 13.

If your payroll calendar is configured so that your pay date falls on the 4th (leap year only) or 5th of April, your payroll software automatically triggers week 53 for weekly payroll, 54 for 2-weekly payrolls and 56 for 4-weekly payrolls.

There is no special process in the software. You run this additional period like you would any other.

You should NEVER manipulate your payroll calendar to force a week 53, 54 or 56 if one is not needed.

How does this affect the Tax / NI calculation?

The NI calculation is performed exactly as it is for every other pay period.

The only change to the tax calculation is that all employee are switched to a week 1 / month 1 equivalent of their tax code. This ignores any previous pay and tax for the year and performs the calculation solely on the gross taxable pay for the period. Your payroll software does this automatically if processing week 53, 54 or 56.

This is the method defined by HMRC His Majesty's Revenue and Customs is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support, the administration of other regulatory regimes including the national minimum wage and the issuance of national insurance numbers. for to deal with these extra periods. Using a week 1 / month 1 tax code for week 53, 54, or 56, can, however, sometimes cause the employee to pay too little tax the year.

As an employer, you do not need to do anything in payroll until HMRC issue a change of tax code notice.

Should this happen the employee receives a P800 from HMRC advising them on the calculated tax for the year and what is owed. HMRC usually deals with this by issuing a new tax code for the employee to deduct the shortfall in tax in the following tax year.

Good to know...