Changing the interval between paydays

If you change the interval at which you pay your employees - for example from weekly to monthly payments or vice versa, you must ensure that you continue to work out PAYE tax and National Insurance contributions (NICs) correctly.

Note that changes to payment interval cannot currently be processed using the P11 Calculator within HM Revenue & Customs (HMRC's) Basic PAYE Tools package. You will therefore need to record any changes using a paper form P11 or third-party payroll software with the appropriate functions.

On this page:

Shortening the interval between paydays

NICs changes

The implications for NICs of shortening your payment interval - from monthly to weekly, for example - are straightforward. From the first payday after the change of interval, calculate NICs using the appropriate tables for the new earnings period.

PAYE changes

For PAYE tax deductions, you have to switch to using the appropriate tables for your new shorter earnings period. But the timing of this switch can vary as follows:

  • if you haven't already paid the employee during the month in which the change of interval takes place, start using the weekly PAYE tables from the first payment after the change of interval
  • if you have already paid the employee in the month of change, start using the weekly PAYE table from the beginning of the following tax month

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Lengthening the interval between paydays

Dealing with PAYE and NICs when lengthening your payment interval is quite straightforward.

PAYE changes

You work out PAYE on the basis of the new earnings period from the first payment after the change.

NICs changes

For NICs purposes you'll need to check whether your last payment to an employee under your old shorter interval falls in the first of your new, longer earnings periods.

If it does, then the NICs from the earlier payment need to be taken into account when working out the NICs for the later payment. The total NICs must not exceed the amount that would have been payable if the two payments were added together and monthly NICs worked out on the combined total. If no payments under your old shorter interval fall into your new, longer interval, then the NICs due in the first of the new intervals should be calculated as normal.

NICs if an employee joins your contracted-out scheme at the same time as their pay interval is lengthened

In this instance, if two payments overlap in the same earnings period, then NICs are payable at the applicable contracted-out rate on the combined total of the payments.

Read about completing the paper form P11

Download CWG2, 'Employer Further Guide to PAYE and NICs' (PDF 779KB)

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