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Pay reference period (PRP)

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Summary

How a pay reference period (PRP) works in Sage Payroll.

Description

The pay reference period (PRP) is a term used in pension enrolment. It is the time frame for measuring earnings and contributions for automatic enrolment.

 The length of a PRP is the time between pay dates, for example, weekly or monthly.

Sage Payroll uses PRPs aligned to tax periods. The tax calendar determines when it starts and ends.

  • Tax week 1 starts on the 6th of April and ends on the 12th of April
  • Tax week 2 starts on the 13th of April and ends on the 19th of April etc
  • Tax months run from the 6th of a month and end on the 5th of the following month.

Refer to our Tax week and tax month calendar (opens in new tab).

Resolution

Inform your provider from the start that your PRPs align with tax periods. To help you determine your PRPs, use the table below:

Pay frequencyPRPExamples
MonthlyMust align to the tax month.Your pay date is 25 November. This falls into tax month 8. The PRP is 6 November to 5 December.
WeeklyMust align to the tax week that the pay date falls into and starts on the first day of that tax week.Your pay date is 27 November. This falls into tax week 34. The PRP is 23 November to 29 November.
Two weeklyMust align to the two consecutive tax weeks that the pay date falls into. It starts on the first day of the first tax week and ends on the last day of the second tax week.Your pay date is 19 November. This falls into the tax period weeks 33 and 34. The PRP is 16 November to 29 November.
Four weeklyMust align to the four consecutive tax weeks that the pay date falls into. It starts on the first day of the first tax week and ends on the last day of the fourth tax week.Your pay date is 26 November. This falls into the tax period weeks 33 to 36. The PRP is 16 November to 13 December.
You can also download The Pension Regulator’s PRP calendars.

 TIP: If your PRP aligns to tax months, it’s common for the first pension deduction to be higher than you expect. This is because all staging dates are on the first day of the month. A tax month runs from the 6th to the 5th of the following month. This means the first pension deduction is for one month and five days rather than one month.

For further help setting up pay reference periods, please consult your pension provider.