In the run up to Christmas the last thing you want is to cause your staff problems. It’s really important to get your Christmas payroll right.
Staff running short in January
Many employers chose to pay their staff early in December, but many people spend based on what they have in their bank account. This can lead – especially when buying presents and going to parties – to staff feeling artificially flush. Your team can then end up feeling short of money and having a miserable January.
Missing the Christmas payroll payment date
We often forget the origin of the name “bank holiday” – they were of course originally named for days the banks were closed. This should remind everyone to make sure you set up payment in good time so that staff get their pay by the date they expect. Not only is this a legal obligation as an employer, it’s also particularly important for your team at what can be an expensive time of year.
Affecting your teams’ benefit payments
Some of your staff may be in receipt of in-work benefits, most commonly Universal Credit. Of course they may be getting other legacy benefits too such as working tax credit or child tax credit. Because of the way HMRC calculates this a change to payment dates could adversely affect your staff. HMRC have very clear and helpful guidance on how to avoid this here, but see below for our top tip
A suggested approach
Our recommended approach for employers who run their own payroll is to:
- Agree your timetable for December payroll in November and schedule in enough time for the usual checks and changes.
- Chose an earlier date for paying staff in December to avoid issues over bank holidays. We recommend at least one day before the last day you’ll be working to ensure you can check payment has been successful
- Communicate with your team about the Christmas payroll at the beginning of the month (and any changes e.g. Christmas bonuses). Warn them that this will mean a longer gap between pay days.
- Follow your payroll schedule as agreed
- When submitting your RTI to HMRC enter what would have been your USUAL payment date in your payroll submission.
- Double check that payments have been made successfully
- Put your feet up with a Christmas film and a well deserved Christmas snack
If you are a Holy Brook payroll client we normally contact you in November to discuss your payroll plan for December.
If you found this useful you may find this blog post on the National Insurance increase worth a read