HMRC have issued clarification for employers whose employees might be affected by ‘week 53’ payments where they are paid weekly, 2-weekly or 4-weekly and the last payday for 2012–13 fell on 5 April 2013.

Extra payments occur because there are 52 weeks in any one year, plus one extra day, or two extra days in a leap year. If made, these extra payments are called 'week 53' payments.

PAYE is deducted differently from 'week 53' payments. HMRC treats it as a non-cumulative payment (also known as 'Week 1'), meaning that it is treated in isolation and tax is deducted without taking into account previous pay and tax details. So the tax code should be non-cumulative in all cases. The amount of extra 'tax free pay' equates to:

• week 1 for employees paid weekly (1/52 x the Personal Allowance)
• week 2 for employees paid fortnightly (2/52 x the Personal Allowance)
• week 4 for employees paid four-weekly (4/52 x the Personal Allowance)

It is important to note that these payments may result in an underpayment of tax for the employee due to the extra Personal Allowance (tax free pay) provided to protect the level of take home pay they receive in that pay period.

All other deductions, such as National Insurance contributions, are deducted as normal from pay on 'week 53' payments.

When making a 'week 53' payment to submit the employee pay details to HMRC in a Full Payment Submission, the following tax week numbers should be used:

• '53' if there are 53 weekly payments in the year
• '54' if there are 27 fortnightly payments in the year
• '56' if there are 14 four-weekly payments in the year