Week 53 payments may result in an underpayment or overpayment of tax for the year. This is due to HMRC guidelines specifying that a Week 53 payroll must be calculated on a Week1/Month1 basis. Thus giving an additional personal allowance to protect the level of take home pay the employee receives.
The yearly tax allowance is calculated on a 52 week year. i.e. The Tax Code 1257L gives the employee a tax allowance of £12,570 for the 2025/26 tax year spread over 52 weeks, giving a free pay of £241.92 per week. For a week 53 calculation, the employee is given an additional free pay allowance of £241.92, therefore increasing the yearly allowance to £12,821.76. The difference is what HMRC will be requesting.
An overpayment will occur if within the 52 week year, an employee has not reached the £12,570.