Making an Advance Payment in 2019 for 2020
Where an employee's pay will straddle two tax years
Please note credits and rate bands cannot be given in advance when an employee's pay straddles two tax years.
An employee is normally paid on Thursday but will receive two weeks' pay on 24th December in respect of 26th December 2019 and 2nd January 2020.
In this instance, the following will apply:
- the payment date must be reported as 24th December using the credits and rate bands for week 52 only
- the employee will subsequently not be paid in week one of 2020
- the employee will then get the benefit of two weeks' credits and rate bands in week 2
- It is not appropriate to use week 53 in this scenario unless the pay date falls on 31st December
- Incorrect use of week 53 will cause underpayments for employee
Where a Credit Transfer Payment will fall on 1st January 2020
Where your employees' normal pay date is due to be 1st January 2020 and payment is due to be paid by credit transfer, Revenue will accept the pay date to be reported as the 1st January 2020 where funds are made available to employees on the previous day only i.e. the 31st December 2019.
- An employee’s normal pay date is due to be 1st January 2020 – payment cannot be made on the 1st as it is a bank holiday
- Instead, payment will be made on 31st December 2019 (the previous day)
- In this instance, the pay date can be reported as 1st January 2020
- The employee's credits and rate bands will be applied for 1st January 2020 even though payment was paid in the prior year