Can you believe it’s the last month of the year already? For your employees, this is a joyous time of celebrations, family and a few days off work, but for your payroll team, this time can be the nightmare before Christmas. Possible payroll issues are always a concern, but never more so than at this time of year. So, we have considered the top payroll related issues you may experience and advice on how to avoid them.
The Christmas Bonus Issue
Many businesses provide bonuses to their staff during this season to encourage loyalty, increase productivity or to say thank you for hard work and give people a bit extra to spend at this expensive time of the year. While this might look a straightforward exchange, attributing the correct tax to these gifts can be confusing for the payroll team and employees alike. To avoid this issue, considering gifting your employees by availing of the Small Benefits Exemption Scheme and using vouchers instead. If the decision remains to provide a cash bonus, ensure that all parties are aware that this bonus is still treated and taxed as if was earned via overtime or as a bonus at any other time of the year. Avoiding any confusion when their Nett Pay does not match their expectations.
The Payment Dates Issue
Over the festive season, most if not all businesses (including banks) have their regular working hours affected. This means that depending on your current payment schedule, you may have to bring the regular salary pay date forward. For example, if you operate your payroll every week, then you might need to pay employees in advance to cover any days of business shut down over Christmas. As a result, the payroll processing timetable may also need to be brought forward to ensure the payroll is run correctly. To avoid any issues, let the payroll team know well ahead of time what the arrangements are and advise staff that their salary will hit their bank accounts earlier than normal.
The SEPA Issue
Payments or transfers made in the European Union are now made as SEPA transfers, including non-urgent transfers, Standing Orders, and Direct Debits – this includes salary payments too. However, SEPA Payments Processing over the Christmas and New Year period are affected by the season as the 25th, 26th December, and the 1st January is non-SEPA processing days. When planning your payroll payments scheduled for December, it is essential to consider these dates to avoid a delay in payments to your employees.
The Public Holiday Issue
There is always some confusion about entitlement to holiday pay and extra pay for employees on bank holidays or public holidays of which Christmas Day, St. Stephens Day and New Year’s Day are considered. Christmas Eve and New Year’s Eve are not public holidays. If your employees are required to work on public holidays, they are entitled to be paid at their usual rate and are also entitled to either an additional day’s pay or an extra paid day off. To avoid any issues around this don’t forget to plan for additional payment to these employees and ensure they are fully aware of their entitlements around this issue.