Summary
Resolution
To view a recorded webinar that explains the payroll year-end process, select play below.
1. Check if you have a week 53
An extra pay run at year end (often called a week 53) happens because a year doesn't split exactly into 7-day weeks.
If you pay your employees monthly, you don't have a week 53.
You have a week 53 if your normal payday is Saturday and run a:
- Weekly payroll
- 2 weekly payroll
- 4 weekly payroll
Read our article Extra pay run at year end (Week 53)
▼How tax and national insurance (NI) calculates in week 53
To comply with government legislation, tax calculates using a week 1 / month 1 free pay allowance. It ignores previous pay and tax, and automatically calculates on a non-cumulative basis.
Tax
To comply with government legislation, tax calculates using a week 1 / month 1 free pay allowance. This ignores previous pay and tax and calculates on a non-cumulative basis. Non-cumulative means the tax calculation doesn’t include the employee’s year-to-date figures. Instead, at week 53, the system calculates tax as if it’s the first pay run of the tax year.
TIP: If you need to process a week 53, your employees may receive a form P800 to notify them of an underpayment of tax. HMRC rules state that payroll calculations for week 53 allow for extra personal allowances. This protects the level of take-home pay that the employee receives. This is perfectly normal as payroll follows HMRC rules and calculates tax correctly at week 53.
NI
The system calculates NI for employees as it would in any other pay period, using the weekly, two-weekly, or four-weekly thresholds, as appropriate
For directors using the per pay run method, their NI recalculates in week 52 cumulatively using the annual thresholds. It then calculates cumulatively again in week 53 still using the annual thresholds. For directors using the cumulative method, the system calculates their NI for week 53 cumulatively, just like in any other pay period.
2. Process any leavers
Before you process your final pay run, enter the last working day for any employees who have left your employment on or before 5 April 2025.
For the detailed steps to process leavers, read Processing leavers.
3. Process your final pay run and any holiday pay
Before you can run your year end, you should complete your final pay runs of the 2024/2025 tax year. You must submit no later than 19 April 2025.
If you process more than one pay cycle, make sure that you update the last pay run of the tax year for each pay cycle.
You must submit your full payment submission (FPS) for the last pay run.
TIP: This isn't your final submission for the tax year. You make the final submission when you process your year end.
You must also record your P32 payment to HMRC, and if required submit an employer payment summary (EPS) for month 12.
If you have any outstanding or failed RTI submissions for the 2024/2025 tax year, these show in the HMRC section on the Summary tab.
Submit these in order, from oldest to the most recent.
4. Pensions and payroll year end
If you have a pension scheme set up in your payroll, there are steps you need to complete for your Pension Provider.
For further information read the relevant article:
- Nest pension contributions and payroll year end
- Smart pension contributions and payroll year end
- The People's Pension contributions and payroll year end
- NOW Pension contributions and payroll year end
If you don’t see your pension provider listed, contact them to ask about their payroll year-end requirements.
Key dates over year end
To see all the relevant year end deadlines, check the table below.
Africa
Asia
Australia
Canada
France
Ireland
Kenya
Nigeria
Portugal
South Africa
Spain
United Arab Emirates
United States
Germany