Planning your December payrolls? Get expert advice to support your clients from BrightHR…
Christmas is a busy time of year bringing lots of unique payroll challenges to your desk. Having a good system in place in time for December is highly recommended if you want to have yourself a merry little payday! But what do you need to consider when delivering December payrolls?
From rules around working on Christmas Day and offering bonuses to questions around whether to pay staff early: We’ve gathered expert tips to support your clients and save you from getting wrapped up in end-of-year payroll stress.
Let’s get into it. What can you ask your clients now to make sure their December payroll runs smoothly?
Decide if you want to give them the option to pay employees early for Christmas
First things first. It’s important to decide whether you will give your clients the option of when they pay their employees over the festive period. There are no rules in place that force you to offer clients an earlier payday in December. But there are pros and cons to opting to giving clients the option to pay staff early or sticking to their usual pay date.
Some employers may choose to pay staff a little early to help employees make sure all festive activities are paid upfront. And as a service provider, allowing this option as part of your service offering may show alignment with your client’s values.
However, you may want to challenge them to consider that while paying employees early can feel welcome in December, it can make the wait time between December and the January pay date feel extra-long.
If they do decide pay employees early, your clients will need to communicate with their employees effectively so as not to submit information late.
It’s worth noting that employees who claim Universal credit will potentially be impacted by any change in pay date in December, as claims are based on the amount paid to them within the claim period. Therefore, bringing forward payday may impact their entitlement to benefits.
Running payroll early can also increase the business risk of overpaying staff if they leave over the festive period. If clients pay up to and including the last working day of the month, but pay on 20th, any late leavers not recorded on payroll may ultimately be overpaid and owe you back the money for the days not worked.
No matter what you decide in relation to your clients, it’s essential you follow the right rules. If you do decide to pay employees early and you normally pay your staff by BACS, any new pay date will have to be processed in time to ensure a clear BACS processing day to facilitate payments.
You must make sure the clients regular pay date is reported to HMRC, via your full payment submission (FPS) and employer payment summary (EPS). Not just the date you change your pay date to. And make sure that you communicate with them early so that everyone is aware of the new payroll cut-off date to ensure a smooth operation and continued service to your clients.
Review tax rules around Christmas bonuses and gifts
Help your client communicate holiday rules with their employees
If a client’s holiday year runs from January to December, Christmas is likely to be a busy time for annual leave in their team. Having a fair system in place for staff holiday planning to deal with requests on a first come first serve basis is the best way to avoid conflict and holiday clashes that can leave clients understaffed.
It’s also important to support clients in communicating annual leave policies early on in the year. You can’t control when staff choose to book a holiday. But if you opt for a use-it-or-lose-it approach, make sure you encourage employees to take their full annual leave entitlement evenly throughout the year to save your team from a last-minute winter wipe-out!
If your client’s industry requires employees to work over Christmas, it’s important to lay out pay rules in employee contracts. For example, there’s no legal right to be paid more for working on a Bank Holiday. But there may be a contractual right to higher pay or double pay, in which case your employee must be paid accordingly.
Need more in-depth support this December?
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Discover how BrightHR and BrightHR Payroll can help you support your client’s payroll and HR needs here.
