A week 53 occurs when you pay date falls on April 5th. This scenario will occur if you pay your employees weekly, 2 weekly or 4 weekly. You will not have a week 53 if you pay your employees monthly.
In the 2019/2020 tax year, tax week 53 is Sunday 5 April 2020. You have a week 53 if the following applies:
Your normal pay day is a Sunday and
- You last processed your weekly paid employees on Sunday 29 March 2020
- You last processed your fortnightly paid employees on Sunday 15 March 2020
- You last processed your four weekly paid employees on Sunday 1 March 2020
In each of these instances, you’re next due to process the employees on 5 April 2020, week 53.
These are the only scenarios where you must process a week 53, the next processing date for all other pay dates falls into the 2020/2021 tax year.
How is tax and NI is calculated when you process a week 53?
Tax is calculated on a week1/ month1 tax basis. This will ignore previous periods where tax might be have been calculated cumulative basis. This means it will ignore the year to date amounts and tax the employee(s) are what they earn in this period only.
National Insurance is calculated the same as it is done in every other period. National Insurance is calculated based on what the employees earns in a period, it does not calculate based on the year to date amounts. If you have any directors in the payroll, please note their calculation method is annual so they national insurance will be recalculated automatically when you reach period 52.