Depending on your payroll schedule, you might have a week 53 when running your final payroll.
This article will cover:
Find out if you have a week 53
Week 53 will apply to you if you pay your employees weekly, fortnightly or on a four-weekly basis and the last pay day falls on April 5, which is the last day of the tax year.
If you pay your employees monthly, you don't need to worry about week 53. You can stick your regular payroll schedule.
If you use Advanced Payroll
You'll have a week 53 if you last processed payroll for your:
- Employees paid every two weeks on Wednesday 22 March, 2023.
- Employees paid every four weeks on Wednesday 8 March, 2023.
These are the only times you need to process a Week 53. Any pay dates after these will fall into the following tax year.
Tax and National Insurance calculation
When you process a week 53, taxes are calculated on earnings of that specific a week or month only. It doesn't take into account any previous cumulative calculations. This means that only earnings from the current period are considered, not the earnings from the previous periods.
National Insurance is calculated in the same way as any other pay period. It's based on the earnings of the specific period and doesn't consider year-to-date amounts.
Directors on payroll
If you have directors on your payroll and they are calculated using the alternative method, there will be an annual recalculation. This recalculation will automatically occur when you reach week 52.
However, if there is a week 53 (for example, if the director is paid on 5 April), an additional calculation will take place. It's important to note that this additional calculation doesn't apply to directors who are using the annual NIC method.