[Finance] One for the DULLARDS

[KZNSeagull]

The company that my wife works for has announced that they are having a 53 week financial year which means that there will be an extra pay day this month. They normally get paid every 4 weeks which will happen on March 15th but then they will get paid again for one week on March 22nd, then every 4 weeks thereafter. They have also said that the week paid on March 22nd is likely to be less than a quarter of their normal pay as the HMRC allowances remain the same.
Now I guess this is because there are 53 Thursdays or Fridays in their financial year so the question is - Why are they doing this? How can a financial year be 53 weeks long? Why would a company have a financial year that is different to HMRC's?
The company that I work for also pays every 4 weeks but they are not doing this so I cannot give a sensible answer to her understandable confusion.
Thanks awfully.

 

[Springal]

You don’t need to have a financial year which matches. My company is Feb - Jan.

 

[Stat Brother]

My company is 'doing a palace'.

Having booked Rome on Friday I was told on Monday we weren't getting paid 'for a few weeks'.

 

[KZNSeagull]

My company is 'doing a palace'.

Having booked Rome on Friday I was told on Monday we weren't getting paid 'for a few weeks'.

Lovely. Let's hope that you get more than 2p in the pound.

 

[Weststander]

The PAYE system always comprises 53 weeks, I assume because 52 x 7 cannot attain 365 or 366. This has no effect on calendar month paid employees.

I presume, as you kind of touched on, this happens to be PAYE year of 53 weeks for that particular employer. This has to happen occasionally because 52 weeks x 4 isn’t enough to match 365 + 365 + 365 + 366 days over 4 years.

A business year-end can be whatever they want, it’s irrelevant to payroll and PAYE considerations.

 

[KZNSeagull]

The PAYE system always comprises 53 weeks, I assume because 52 x 7 cannot attain 365 or 366. This has no effect on calendar month paid employees.

I presume as you kind of touch of this happens to be PAYE year of 53 weeks for that particular employer. This has to happen occasionally because 52 weeks x 4 isn’t enough to match 365 + 365 + 365 + 366 days over 4 years.

A business year-end can be whatever they want, it’s irrelevant to payroll and PAYE considerations.

Ok that makes sense but why then would the company I work for not do this as well as they also pay 4 weekly?

 

[Weststander]

Ok that makes sense but why then would the company I work for not do this as well as they also pay 4 weekly?

Until now, have you both always had 13 pay days per annum?

 

[KZNSeagull]

Until now, have you both always had 13 pay days per annum?

I have, yes. She has only been there for a year so not sure.

 

[Weststander]

I have, yes. She has only been there for a year so not sure.

Yours is the norm.

I’m not sure with limited info for Mrs.KZN eg do they do this every March/beginning of April, or is this a one off realignment. For you guys, just check the gross pay across this entire period is as expected.

 

[KZNSeagull]

Yours is the norm.

I’m not sure with limited info for Mrs.KZN eg do they do this every March/beginning of April, or is this a one off realignment. For you guys, just check the gross pay across this entire period is as expected.

It a realignment that happens every 5 or 6 years according to the notice they have put out. Their financial month end ends on 24th March.

The notice says "As on previous occasions when this situation has arisen the Company's earnings periods for payroll purposes also move back one week to realign with the new period dates for 24/25. To prepare for the change in pay cycle as in previous years the Company will make an additional payment to employees in payroll period 13 of the current tax year one week after the normal pay day"

 

[Weststander]

It a realignment that happens every 5 or 6 years according to the notice they have put out. Their financial month end ends on 24th March.

The notice says "As on previous occasions when this situation has arisen the Company's earnings periods for payroll purposes also move back one week to realign with the new period dates for 24/25. To prepare for the change in pay cycle as in previous years the Company will make an additional payment to employees in payroll period 13 of the current tax year one week after the normal pay day.

Why didn’t you say that at the beginning? Just joking

 

[KZNSeagull]

Why didn’t you say that at the beginning? Just joking

Still doesn't make much sense really

 

[Papak]

Why doesn't she ask her colleagues who have been around long enough to have experienced it before?

It does sound odd to me but I'm monthly paid so I get 1/3 of a days pay extra per annum when it isn't a leap year

 

[KZNSeagull]

Why doesn't she ask her colleagues who have been around long enough to have experienced it before?

It does sound odd to me but I'm monthly paid so I get 1/3 of a days pay extra per annum when it isn't a leap year

Because they don't really understand it either

 

[Shropshire Seagull]

Leap year?

Remember all the monthly paid permies used to moan that they had to work an extra day [29-Feb] but with no extra pay.

 

[AZ Gull]

The company that my wife works for has announced that they are having a 53 week financial year which means that there will be an extra pay day this month. They normally get paid every 4 weeks which will happen on March 15th but then they will get paid again for one week on March 22nd, then every 4 weeks thereafter. They have also said that the week paid on March 22nd is likely to be less than a quarter of their normal pay as the HMRC allowances remain the same.
Now I guess this is because there are 53 Thursdays or Fridays in their financial year so the question is - Why are they doing this? How can a financial year be 53 weeks long? Why would a company have a financial year that is different to HMRC's?
The company that I work for also pays every 4 weeks but they are not doing this so I cannot give a sensible answer to her understandable confusion.
Thanks awfully.

It a realignment that happens every 5 or 6 years according to the notice they have put out. Their financial month end ends on 24th March.

The notice says "As on previous occasions when this situation has arisen the Company's earnings periods for payroll purposes also move back one week to realign with the new period dates for 24/25. To prepare for the change in pay cycle as in previous years the Company will make an additional payment to employees in payroll period 13 of the current tax year one week after the normal pay day"

Over here in the US my company has a bi-weekly payroll - we get paid every other Friday. (I think that is fairly typical over here).

Doing the maths, that means that in most years we get 26 paychecks. However, 26 x 14 = 364, so every few years we effectively will get a 27th pay period.

I assume that your wife's company is simply accounting for this exact same phenomenon (except they pay every 28 days and not every 14 days).

Over here, because we simply get paid every two weeks, we don't even think about a "monthly" pay period and so it really passes by without anyone thinking about it (you would only notice the "extra" pay period if you worked out what you had been paid over the course of a calendar year). I think the confusion your wife has is because the company is having to account for pay that, by convention, is paid "calendar monthly", and therefore every few years they will have to account for this extra pay period that is really just caused because a 28-day pay period is incompatible with a calendar-based month.

Does that make sense?

 

[KZNSeagull]

Over here in the US my company has a bi-weekly payroll - we get paid every other Friday. (I think that is fairly typical over here).

Doing the maths, that means that in most years we get 26 paychecks. However, 26 x 14 = 364, so every few years we effectively will get a 27th pay period.

I assume that your wife's company is simply accounting for this exact same phenomenon (except they pay every 28 days and not every 14 days).

Over here, because we simply get paid every two weeks, we don't even think about a "monthly" pay period and so it really passes by without anyone thinking about it (you would only notice the "extra" pay period if you worked out what you had been paid over the course of a calendar year). I think the confusion your wife has is because the company is having to account for pay that, by convention, is paid "calendar monthly", and therefore every few years they will have to account for this extra pay period that is really just caused because a 28-day pay period is incompatible with a calendar-based month.

Does that make sense?

Yes, sort of. I just don't understand why they do it and the company I work for does not. But hey ho, as long as she gets paid the correct amount it doesn't really matter

 

[AZ Gull]

Yes, sort of. I just don't understand why they do it and the company I work for does not. But hey ho, as long as she gets paid the correct amount it doesn't really matter

So it sounds like your wife's company is "re-setting" the pay period (by pushing the 28-day period back by one week, with that one week forming an extra, mini-pay period).
If your company doesn't do that, I think you'll find that you would get 13 pay periods in almost every year, but very occasionally (every 22 years or so) you would get a 14th pay period. You'd have to be a long-term employee to notice it though!