Dates to remember
You’ll probably be flat out in December, especially if your business shuts down over Christmas and new year. After all, there's one less week to process the payroll!
Let’s say your employees normally get their pay packet on the last working day of the month. If you shut down over Christmas, you’ll need to process the payroll earlier than normal, because from Saturday 24th December you’ll be at home roasting potatoes and finding the most family-friendly film to put on TV.
Monthly paid employees will be paid early. So instead of the last day of the month, they’ll likely get paid on the 19th (or perhaps the 23rd) December - which means an extra-long wait until their next pay day in January!
Fortnightly paid employees will be paid mid-month (as normal), then may receive an early payment on the 19th or 23rd of December. They’d be due another payment in the first week of January; if you (or the payroll team) aren’t back from leave in time to process this pay, you’ll need to include it in their pay packet in December i.e. pay them in advance.
Self-employed contractors won’t be affected, they will send their invoices and be paid as per the payment terms of your business, as normal.
Your payroll processing timetable will be brought forward. If you don’t start the process sooner, you won’t hit that earlier payday deadline.
You’ll need to communicate to your employees that their payday will be different. You can do this by sending a companywide email or make an announcement at a company meeting.
If you do bring your payday early in December, you still need to report your normal payday as the payment date on your Full Payment Submission (FPS) and make sure that the FPS is submitted by this date.
So, if you pay on Friday 16th December, but the contractual date is Friday 30th, report the payment date on the FPS as 30 December and make sure the submission is sent on or before 30th December.
Given the extra long gap between pay dates from December to January, have you considered providing support with financial wellbeing for your employees? The Money Advice Service is a great place to start!
If you have employees on maternity leave during a Christmas shutdown and you choose to change the December pay date, this will affect their average holiday pay. Some payroll software will account for this, if yours doesn’t you’ll need to make sure you adjust the calculation so they get paid correctly.
