Are you paying staff early this Christmas?
Christmas is round the corner, a time for employees to enjoy the holiday season with their families and friends. Paying your staff early can be a nice gesture for employees, so they get paid before Christmas.
Should I pay my employees early this Christmas?
This depends on you as a company, though most companies choose to pay their employees early as payday often falls on a bank holiday. You may also wish to shut down between Christmas and New Year.
Some things to keep in mind when paying employees early in December:
- FPS and EPS Submissions
No matter when you decide to pay your employees, bear in mind that you should ensure your regular pay date is reported correctly to HMRC. Employees who receive universal credit could be impacted if the usual pay date is changed via your FPS submission. Although you pay your employees early, you will have until your normal payday to submit your Full Payment Submissions (FPS) and Employer Payment Summary (EPS). So if you move your pay date forward, your FPS date will still be as contractually stated, and you can submit your FPS early, or you can wait for the usual payday.
For example, if your employees are usually paid on 30th December but will now get paid on 22nd December, you have until 30th December to report this to HMRC.
Similarly, your EPS submission should happen as per the regular timetable – that is sent between the 20th of the current month and the 19th of the following one. Remember that you can incur hefty HMRC fines if your returns are late or incorrect.
You can find out more here: https://www.gov.uk/running-payroll/reporting-to-hmrc
- Universal Credit
Keeping to regular reporting dates with EPS and FPS submissions is also a good idea, given that it protects employees on Universal Credit.
- Bacs Files & Payments
If you’re pushing your payday earlier, remember that you’ll need to generate your BACS file ahead of time. It will need to be dated two banking days before pay day.
Agree on payment dates and payroll task deadlines
If you’re planning on paying your employees early, ensure everyone is on the same page. If both the Finance and HR team share payroll, then make sure there’s a proper communication channel in place and that both teams are aware of their responsibilities and deadlines to meet.
It’s worth notifying key stakeholders early about the different arrangements for December so everyone can plan ahead of time. It may be that your payroll process timetable needs to be brought forward so people are paid earlier and, at a minimum, on time.
Notify your staff
Once you’ve agreed when you will be paying in December you need to notify your staff and it’s also wise to advise them that the next pay date in January will be the normal pay date.
If you would like support with your payroll, our experienced and professional team are here to help. Nigel and Steve have been supporting organisations employing 1 to 150 employees, for many years. Having their knowledge and expertise will give you peace of mind that your payroll is HMRC compliant.
Get in touch to find out more: email@example.com