Depending on the date you pay employees, some years you may need to do an extra pay run. Normally there are 52 weeks in the tax year for a weekly pay frequency, 26 for fortnightly and 13 for 4-weekly but some years you may get 53, 27 or 14. If your payroll falls into this category, Shape will create this extra pay run and do the correct calculations for you.
Monthly payrolls are never affected by this as there are only 12 pay periods.
Tax Year 2023-2024 - It's a leap year!!
Normally only pay dates that fall on the 5th April will have a week 53. Last year this was a Wednesday but this year, due to the extra day in February there are two days where a week 53 can occur. As lots of employers pay on a Thursday or Friday, there will be more week 53's processed this year than normally.
Week 53 - Thursday 4th April and Friday 5th April
If you normally pay weekly on a Thursday or Friday, you will have a Week 53 this year if you paid on the following dates:
Pay Run Frequency | Last Pay Run | Next Pay Run |
|---|---|---|
Weekly | Thursday 28th March 2024 | Thursday 4th April 2024 |
Weekly | Friday 29th March 2024 | Friday 5th April 2024 |
Fortnightly | Thursday 21st March 2024 | Thursday 4th April 2024 |
Fortnightly | Friday 222nd March 2024 | Friday 5th April 2024 |
Four weekly | Thursday 7th March 2024 | Thursday 4th April 2024 |
Four weekly | Friday 8th March 2024 | Friday 5th April 2024 |
This is the date that you normally tell HMRC the employees are being paid and appears on the FPS, not the date you have processed the payroll or sent the money from the bank.
How do you get a week 53?
Once you complete week 52, if the above pay dates have been used, Shape will automatically create a week 53 (weekly), week 54 (fortnightly) or week 56 (four weekly).
How does this affect employees pay?
To protect an employee's pay due, HMRC guidance states that when an extra pay run is due in the tax year, the employee's pay is calculated on a Week 1, Month 1 basis. This means that the pay is treated as though it is a Week 1 payment and they are given some tax free allowance. This could mean that an employee underpays or overpays tax. HMRC will contact the employee if this is the case, and either change their tax code for the new year if it's an underpayment of tax, or issue them a refund. this only affects those employees that have used up all their tax free allowance in the 52 weeks. If employees still have some tax free allowance left, then the payment is treated as normal and they are likely to not pay any tax.