Prepare for year end

Summary

This guide helps you get ready for payroll year-end in Sage Payroll.

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, complete your final pay runs of the 2024/2025 tax year. This this in the same way your process other pay runs. You must submit no later than 19 April 2025.

▼Holiday pay

For employees on holiday across the year end, process their holiday pay up to 5 April. Process a new payment in week 1 of the new tax year to reflect the remaining holiday payments.

▼Update pay cycles

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:

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.

▼Key dates table

On or before your employees’ pay day	Send your final Full Payment Submission (FPS) of the year.
5 April	Last day of the old tax year.
6 April	First day of the new tax year.
By 19 April	Deadline for your final FPS for the previous tax year.
From 20 April	If you've had to make corrections to the previous tax year, you can now submit a supplementary FPS to HMRC to notify them.
By 31 May	Any staff employed by you on or after 5 April 2025 must have their P60s.
By 6 July	Report employee expenses and benefits if not processed through payroll.
By 22 July	Pay Class 1A NIC on P11D benefits.

Solution Properties

Solution ID: 222001000101798
Last Modified Date: Mon Oct 20 12:05:10 UTC 2025
Views: 0