It might seem a bit early to be planning for Christmas; but with October in full swing, there’s no denying the festive period is fast approaching! As we enter into the final three months of 2023, it’s time to begin forming a plan of action for your December payroll – there are a number of payroll practicalities to consider that differ from the previous 11 months of the year.
We aim to work alongside our clients in the build up to the festive period, to ensure that their employees continue to be paid correctly and on-time. And at EKW Group, we’re no strangers to the chaos of December’s payroll. So, with this in mind, we thought it only fair to share our advice about how best to prepare!
Do you need to pay your employees earlier in December?
Some companies may choose to complete their payroll earlier than usual in December, to ensure that their employees are paid properly before the bank holidays begin. Although you have no legal obligation to pay your employees early in December, it’s no surprise that your team may welcome the gesture of making sure they have enough money to help them through the festivities.
However, whether you pay your employees earlier or later in December, the deadlines for us to report your full payment submission (FPS) and employment payment summary (EPS) to HMRC will remain the same. This ensures that any of your employees who receive Universal Credit will not have their entitlement affected by a slight change in when they are paid.
If you use our BACS service, we will need you to submit your payroll no later than 1.00pm on Tuesday 19th December, so that your employees can receive payment in between the bank holiday period. If you choose to use an earlier payday than usual, then it’s important to remember that we will need to generate your BACS file before this – it must be dated two banking days before your chosen payday.
We would recommend that you decide on your December payday date as soon as possible, so that we can work together to establish an efficient timeline for your payroll.
Are you giving your team any bonuses, gifts, or vouchers?
You may want to thank your employees for their ongoing support with gifts, which could be in the form of bonuses, physical gifts, or vouchers. It’s important to note that bonuses are subject to income tax and National Insurance deductions. If you choose to give a physical gift or voucher, then it must be considered trivial to be exempt from deductions.
To qualify as ‘trivial’, all of the following must apply to your chosen gifts and vouchers:
- it cost £50 or less to provide
- it isn’t cash or a cash voucher
- it isn’t a reward for their work or performance
- it isn’t in the terms of their contract.
If you do choose to give your employees a bonus or non-trivial gift or voucher, then it will need to be submitted with your payroll data and included on their payslip.
Our payroll department will close at 1.00pm on Friday 22nd December 2023, and reopen on Tuesday 2nd January 2024. To arrange your Christmas payroll schedule, please do not hesitate to get in touch with your dedicated payroll advisor.