EIM42420 - Employment income: basis of assessment for general earnings: more than usual number of pay days in the year

Where employees are paid weekly, fortnightly or four weekly there will be some tax years when there are 53 weekly pay days, 27 fortnightly pay days or 14 four weekly pay days. Because certainty of take home pay is so important to taxpayers with regard to personal financial planning the PAYE system allows extra personal allowances on the additional pay day. This has the effect of ensuring consistency of take home pay. Extra personal allowances are also given in other cases where the number of pay days exceeds the norm.

The extra allowances given under PAYE do not apply for assessment purposes. Assessments must only be made on a statutory basis. Any self assessment therefore claws back the extra allowances and creates an underpayment of tax.

When a calculation is made and the result is an underpayment, or the taxpayer is required to complete an SA return, tax must be calculated and charged as normal. Employers encountering difficulties with the operation of week 53 etc procedures should be referred to the “Employers Helpline”