A pay period is the length of time a single pay run pays an employee for. It follows the employer's chosen frequency, most commonly weekly, fortnightly or monthly, and is numbered within the tax year.
What it means
The pay period sets the rhythm of payroll. PAYE is worked out by annualising the period's pay, applying the annual tax tables, then dividing back down to the period, so the period length matters to the calculation. A monthly payroll has twelve periods in a tax year, a fortnightly one twenty-six, a weekly one fifty-two.
Where it fits in
Each pay period produces a payslip per employee and rolls up into the month's EMP201 declaration. Periods are numbered (p01, p02 and so on) from the start of the tax year on 1 March, and year-to-date totals accumulate across them for averaging and the year-end reconciliation.
Key rules
- Length is set by the pay frequency: weekly, fortnightly or monthly.
- Numbered within the tax year, starting at the 1 March year start.
- Drives PAYE annualisation - the number of periods in the year scales the calculation.
- Several pay periods can fall inside one EMP201 month for weekly and fortnightly payrolls.
