Tips for Payroll Around the Holidays

Between weather conditions and the days themselves, processing payroll around the holidays comes with extra challenges. 

Here are some things to be aware of:

Tips for Holiday Payroll

Banks are closed for public holidays, which means that financial transactions, including deposits, can be delayed. There are other challenges to also consider when processing payroll around the holidays. 

Paying Holiday Bonuses

Discretionary or non-discretionary bonuses are a common practice, especially around the holidays. While they are heavily encouraged and can provide a great benefit to employee morale, they do create more work when it comes to processing payroll. 

If bonuses are non-discretionary or are based on the employee’s usual earnings, additional time may be required to calculate those bonuses. 

Bonuses are also still subject to tax deductions. This means that salaried employees may need adjusted payroll calculations for that particular pay period. 

It is worth noting that modern payroll software can help speed these tasks up. 

Special Rates of Pay for Holiday Work

Many organizations provide special rates of pay for work performed on holidays. A common example is employees getting paid time and a half for holiday hours. 

This change in rate of pay not only has an impact on payroll tax calculations and deductions, but it also changes the overtime rate for those days. 

Modern payroll software can help make these calculations for you. Employers should also note that special rates of pay and holiday bonuses are two things an employee handbook should include. 

Submitting Payroll on the Day of a Holiday and Delays in Direct Deposit

One of the biggest challenges is when payroll falls on or around a holiday. Such a situation can cause worry among employees who are hoping to get paid on time, while employers stress about non-compliance with pay schedule laws. 

Employers need to keep their eyes forward, identify if and when this may happen, and adjust their payroll dates as needed. Start your payroll processing cycle earlier to avoid late payments, including payroll cut-off dates.

Modern payroll software can help you make these adjustments with ease. 

Get Help with Payroll Processing

Processing payroll, whether around a holiday or in general, can get complicated. Implementing modern payroll software from a payroll service company can help. It can also become easier to manage payroll around the holidays through outsourced services, one of the many benefits of payroll outsourcing. 

Contact us to learn more about our HCM solutions.