Revenue has published guidance covering the procedure for employers who pay employees on a weekly or fortnightly basis and who may have an extra payday in a tax year if the pay date falls on 31 December (or 30 December in a leap year). This procedure, known as a Week 53 basis, can result in an underpayment of tax at year end as tax bands and credits are granted on a 52 week basis. Finance Act 2018 introduced provisions to ensure that affected employees will not have an underpayment of tax by effectively allocating tax bands and credits on a Week 1 basis.

Regulation 15 of the Income Tax (Employments) Regulations 2018 sets out the procedure to be adopted by an employer on the payment of emoluments to an employee in a Week 53 scenario. Basically, Regulation 15 provides that the employer should use the latest Revenue Payroll Notification (RPN) to deduct income tax on a Week 1 basis.

Where ‘Week 53’ payments occur:

• for income tax deductions – the employer should follow the instruction found in Chapter 8.8 of The Employers Guide to PAYE.
• for USC deductions – the employer should follow the instruction found in Section 4 of the USC guidance.