In the next few weeks, as we approach the year end, one of the most common questions for our support team is 'do I have a week 53'? A week 53 occurs when a pay day falls on 31st December or, in a leap year, on 30th or 31st December.
For 2017, unless your actual pay date is 31st December which falls on a Sunday, you should not be processing a week 53. If you do not pay employees on a Sunday your payroll will finish on week 52 and the next week due to be processed will be week 1 in the 2018 software. If for example, you pay your staff on Fridays, week 51 will be 22nd December, week 52 will be 29th December and that will complete the payroll for the tax year 2017. The next pay date will be Friday 5th January which is in the tax year 2018.
If the pay that would naturally fall due in the first week in January has to be paid in 2017 due to business closure, bank holiday etc it should still be processed as week 1 of 2018 to keep in line with Revenue's PAYE calendar. In this situation, the payment date can be changed to a 2017 date on the bank payment file in the 2018 software to ensure the payment is processed on time.
Many businesses close down before Christmas and do not reopen until the New Year, bank payment files can be uploaded in advance without anybody having to be in the office. Week 53 should only be used in 2017 if the normal pay date is Sunday 31st December.
An error a lot of employers make is when they are paying employees for two and three weeks together at the end of the year and although the software will allow them to use the week 53 facility only two of the three weeks should be processed in the current year's software. The third week should be processed on the new software on its own and the bank file can be changed to whatever date the employer would like the employees paid.
Friday pay date - To simplify things lets go back to the Friday pay date again. I am going on my Christmas holidays on Friday 22nd December and I want to process the payroll until I get back which will be Monday 8th January. I can process the last two weeks together i.e. pay dates 22nd and 29th December on the 2017 software and I can create a bank file. The 2018 software should be installed and the payroll normally due on the 5th January processed as week one. Once updated, the pay date on the bank payments file can be changed to any date in December or it can be left as 5th January at the employer's discretion.