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It’s the most wonderful time of the year! But for payroll professionals, Christmas can bring a few challenges ensuring employees are paid correctly and on time, and that bonuses and the numerous bank holidays are accounted for. Here are some of our top tips to make sure you don’t fall victim to common festive payroll pitfalls this Christmas.
Remember to configure your accounting and payroll software to calculate bank holiday rates for Christmas Day, Boxing Day and New Years Day, and if you’re in Scotland, then 2nd January too. This year Christmas Day and New Years Day both fall on a Monday, and Boxing Day falls on a Tuesday.
Christmas is a popular time for employees to take annual leave so make sure you approve annual leave requests early so you can plan staffing rotas, if you don’t have a company shutdown over the festive period. Using employee payroll self-service systems can reduce the admin burden significantly here as employees can check their holiday entitlement (a popular thing to do at Christmas so they know if any entitlement is being carried over to 2024) and automate their annual leave requests.
Reduce stress for your payroll team by scheduling key payroll activities to work smarter, not harder this Christmas. Scheduling tasks such as payroll calculations, the importing of timesheets and publishing payslips in advance of the festive holiday will not only give your payroll team a break but is a useful approach to adopt for all payrolls to reduce time and manual effort.
Some organisations choose to pay employees early in December, but this is entirely at your organisation’s discretion. However, if you do this you need to bear in mind that employees will have a very long wait for their January pay packet which might not be desirable for some. Secondly, if you do pay employees early then make sure you move your payroll timetable forward to account for this and report your normal payday via RTI as the date shown on your Full Payment Submission (FPS). For example, if you normally pay employees on the 31st of the month, but in December choose to pay them on 22nd December, your FPS must say still say the 31st.
It’s not uncommon for some businesses to offer a Christmas bonus in the form of cash, gift vouchers or cheques but don’t get caught out by the tax man! These are all classed as earnings and should therefore need to be declared as such, meaning you will need to include the value within your employees’ earnings and make the usual deductions such as Tax and National Insurance.
The festive season doesn’t need to be full of stress; with plenty of preparation and using robust tools to help you schedule pay runs and configure bank holidays then everyone can enjoy Christmas in your business, even your payroll personnel.
To learn more about Opera 3 Payroll & HR from Pegasus and how it can help you run your payroll department efficiently and with ease, then please contact us today.
Posted On: December 05, 2024
