A 53-week year is a common reason for an employee to receive an unexpected tax bill. It's worth understanding what's going on so you can reassure them (and know what they need to do).
Why some PAYE years have 53 weeks
Here's the maths behind it:
A year has 365 days (366 in a leap year)
There are 52 weeks in a year – but 52 x 7 = 364, leaving 1 day unaccounted for
That extra day means one day of the week occurs 53 times in any given year
For the 2026–27 tax year (1 April 2026 to 31 March 2027), Wednesday is the day that occurs 53 times. So if your employees are paid every Wednesday, they'll receive 53 pays this year instead of the usual 52.
The same logic applies to some fortnightly and monthly payroll cycles depending on the pay dates involved.
What this means for tax
IRD issues automated tax assessments (usually between May and July) for employees with predictable income based on what's been reported during the tax year.
When an employee receives 53 pays, IRD's calculations can produce an unexpected tax bill, even when everything was processed correctly.
The good news is that IRD will write off the full tax bill if it relates only to the extra pay.
However, if any of the following also apply to the employee, they'll need to contact IRD directly rather than assuming the write-off is automatic:
They used a tailored tax code
They used an unsuitable tax code for PAYE
Tax was deducted at a lower rate than correct on schedular payments, an extra pay, or secondary employment income
Tax was deducted at a lower rate than correct on investment income with RWT deducted
They had annual income over $48,000 and received a Māori authority distribution, or income from election day work (EDW) or casual agricultural work (CAE) (note: check the IRD website for the most current income thresholds, as these are updated periodically)
They had untaxed employee share benefit income
They received a Working for Families entitlement
More information
These situations can cause real anxiety for employees who don't understand why they've received a bill. Being able to explain it clearly, and knowing when to escalate matters, is part of what makes payroll support genuinely valuable.
You can find more information about automatic tax write-offs on the IRD website.
And if you're not sure whether your payroll is set up correctly for 53-week years, or you've had employees flagging issues you're not sure how to handle, feel free to get in touch.
Updated April 2026 | Originally published November 2021
About the author
Karyn Campbell is a New Zealand payroll consultant and founder of Payroll Consult. With 5+ years running her own consultancy and a background in payroll software – including roles across client support, onboarding, and partnership management at a leading NZ payroll provider – Karyn brings a rare combination of technical knowledge and real-world compliance experience. She works with business owners, bookkeepers, and payroll teams across New Zealand, specialising in payroll audits, system reviews, and fixing complex payroll issues for teams that don’t work a typical 9-5.
