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 effected by this as there are only 12 pay periods.
Tax Year 2022-2023
Week 53 - Wednesday 5th April 2023
If you pay weekly on a Wednesday, your first pay run of the year will be Wednesday 6th April 2022 and you will need an extra Week 53 pay run for your employees on Wednesday 5th April 2023.
Here you can see 52 weeks have been completed.
Start Next Pay run and the next pay run will show you the correct date 05/04/2023.
You will then have a Week 53 pay run.
Fortnightly
If your last pay runs ends on Wednesday 5th April, Shape will create a Period 27 (or Week 54 according to HMRC).
4 - Weekly
If your last pay runs ends on Wednesday 5th April, Shape will create a Period 14 (or Week 56 according to HMRC).
You will not be able to create an extra week unless your pay date normally falls on this date.
How does this effect employees pay?
HMRC guidance states that when an extra pay run is due in the tax year, the employees 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. 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.