Christmas is coming and we all know it’s the most wonderful time of the year! But it can also be stressful for a whole myriad of reasons…especially if you’ve not put certain measures and considerations in place for your Christmas payroll.
December payroll needs advanced planning or help from us here at APS Global. Purse strings are tightened for everyone at Christmas, so it’s integral for morale that payments are mind on time or flexibly. To keep the festive cheer going strong, your payroll solutions need to be watertight.
Let’s take a look at the importance of planning ahead to avoid payroll mishaps over Christmas.
Christmas means that rotas and working patterns are thrown into disarray as people take their annual leave and Christmas holidays are taken into account. Most businesses tend to pay their employees at the end of the month, but Christmas is a unique month with unique requirements.
The chances are that your employees would benefit from being offered the option of early payment or flexibility, because of the financial constraints of Christmas. Offering this option requires that your business is clear in its messaging and communicates properly to employees that this isn’t extra wages.
Thinking about this in advance is recommended because it can affect your company’s cashflow, so you need to ensure you can facilitate early payments and also, your payroll team will also be part of Christmas holiday planning.
Even if a payday is brought forward, HMRC see this as normal service and you can still include the normal paydate in a payment submission and send your employer payment summary at the usual time.
Making sure that Christmas payroll runs smoothly is a key way to keep employees happy and prepared personally for their Christmas.
If your business gives Christmas bonuses to its employees then you need to declare this to HMRC as they will tax them. Declaring bonuses and gifts is so your business can pay tax and national insurance on them, unless they are worth £50 or less, it’s not cash or a voucher, it’s not rewarding performance or their contract doesn’t entitle them to a bonus.
Cash bonuses need to be processed through your payroll and pay PAYE tax and class 1 national insurance. A non-cash bonus should be declared on a form P11D and you need to pay class 1 national insurance.
Clients might decide to give bonuses to employees too and this must be declared – if it’s a voucher or cash, the client will pay cash on it and the employer will pay national insurance. For a non-cash gift, the client will pay both tax and national insurance.
For any queries or advice to do with processing your Payroll, especially around Christmas time, please get in touch with our experienced, friendly team. To inquire about how you can outsource your payroll to us at APS Global and ensure your team receives timely, accurate pay and information all year, contact us and we can discuss your specific requirements in detail.