Dealing with 'week 53' payments
In some tax years, the way dates fall mean that you will end up making a payment during 'week 53'. If you pay your employees weekly this translates into a 53rd weekly payment, if you pay fortnightly it means a 27th fortnightly payment and if you pay them four-weekly results in a 14th four-weekly payment. These extra pay days are known as 'week 53 payments'.The key changes for week 53 payments
PAYE (Pay As You Earn) tax is deducted slightly differently from week 53 payments than from usual payments. You will also have to record on the employee's form P14 End of Year Summary that a week 53 payment has been made.
There are no changes in relation to National Insurance contributions (NICs).
If you use payroll software or the P11 Calculator on the Employer CD-Rom, any week 53 payments will be handled automatically. If you use paper-based payroll methods, the different PAYE deduction procedures for week 53 payments are explained in the next two sections.
Find out about the different ways of running your payroll
More about using the Employer CD-Rom P11 calculator
Week 53 deductions for employees with a suffix tax code
The guidance here and in the remaining sections will help you if you operate PAYE using paper forms.
If the employee's tax code is a week 1/month 1 coding
There is no change. You can treat the extra payment as you would any other.
If the employee is on a cumulative code
You need to add up the total free pay up to and including week 52. If this amount:
- Equals or exceeds the total pay for the year (including the week 53 payment), do not deduct any PAYE tax from the week 53 payment.
- Is less than the total pay for the year (including the week 53 payment), you must deduct PAYE tax. To find the 'free pay' adjustment for the payment, use Tax Tables A - for weekly pay consult the Week 1 table, for fortnightly use Week 2, and for four-weekly use Week 4.
Week 53 deductions for employees with a K tax code
With K codes you deduct PAYE tax from the combined total of:
- the week 53 payment
- the additional pay amount shown in Tax Tables A (using the Week 1 table for a weekly payment, Week 2 for fortnightly and Week 4 for four-weekly)
Completing form P14 when a Week 53 payment has been made
You need to enter one of following three numbers in the 'Payment in Week 53' box in the bottom right-hand corner of form P14:
- '53' if you've made a 53rd weekly payment
- '54' if you've made a 27th fortnightly payment
- '56' if you've made a 14th four-weekly payment
