NIM08002 | Earnings Periods: General: Alignment with tax weeks and months

Section 122 of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)

Regulation 1 of the Social Security Contributions Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

The definitions of an tax week, month and year are as follows:

• tax weeks.

These are successive periods of 7 days, including Sundays, beginning with 6 April each year. As the number of days in a tax year is not exactly divisible by seven, any remaining odd days at the end of the tax year are treated as a separate week – “week 53”.

• tax months.

These begin on the 6th day of one month and end on the 5th day of the next. The first tax month begins on 6 April

• tax year.

These begin on the 6 April in one year and end on the 5 April in the next

Earnings periods for the majority of employees who are paid regularly are, in many respects, aligned with tax periods. This is because the first earnings period for such employees always begins on the first day of the tax year.

The practical effect of this rule is that the earnings period for employees who are paid regularly at intervals of a week will correspond with the tax week. Similarly, for earners who are paid monthly their earnings period will correspond with the tax month.

Example

A weekly paid employee is paid each Friday with the first payment being made on Friday 9 April 2021. The employee’s first earnings period in the 2021 to 2022 tax year starts on Tuesday 6 April 2021 and ends on Monday 12 April 2021 - in line with tax week 1. The next earnings period begins on Tuesday 13 April 2021 - in line with tax week 2.

Some employees, however, are paid regularly but at intervals that are not exact weeks or months. In such cases the prescribed earnings period will not correspond with a tax week or month. An example would be an employee who is paid every ten days. Nevertheless the first earnings period for these earners will still begin on the first day of the tax year.