Week 53: What It Means For Your Taxes
If you’re a PAYE employee in Ireland and are getting paid weekly, fortnightly, or every 4 weeks on a Thursday, then you could be affected by the 53 week issue. Normally this occurs where 31 December, or in a leap year, 30 or 31 December, is a pay day
The implications of this may mean you’ve overpaid tax and could be owed up to 100's of euro. If you’re paid monthly, you don’t need to worry about this but if not, READ ON!
The average Irish tax refund is €1,880
It’s a payroll issue
The 53 week issue arises from the fact that someone who gets paid weekly for example, has their annual tax credits and bands split into an amount across 52 weeks of the year.
So if you get paid on a Thursday, and there are 53 Thursdays in a year instead of 52 and all your credits and bands were allocated for 52 weeks, you could end up paying 40% tax on your income for that week!
For example, if in 2015 your first pay date fell on Thursday January 1 then your last pay date fell on Thursday December 31; that’s 53 weeks! And depending on the date you’re paid, the same logic could be applied to 2014, 2016, and 2018.
How can it be fixed?
Typically payroll will correct for this and give you an extra week’s tax credits and tax bands, however this doesn’t always happen! It also affects USC deductions but employers should also correct for this. There is no change in the way PRSI is calculated.
If isn’t sorted by payroll then you could be owed anything from around 200 euro, depending on how you get paid.
Revenue get their information from payroll, so if the adjustment was not made correctly, you could end up out of pocket! Revenue will not apply this if your payroll doesn’t, so it’s worth checking to find out if you’re owed a refund.
From 2016 onwards pay frequency is visible on the new format of P60s issued by employers and the 53 weeks should be visible in the P60 for all years (there will be a tick).
However, sometimes there is no pay frequency on the P60 especially for years prior to 2016, but Revenue held such an information reported by the employer on the annual P35 so it's best to check with Taxback.com to see if it applies.
If you send us your P60 at info@taxback.com or fill in the short form, then we can check this for you and apply for a refund on your behalf.
The average Irish tax refund is €1,880
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