Payroll processing can’t wait for managers on extended leave to return for approvals. Before your management team heads off on their break, confirm that all necessary payroll approvals are completed or that alternate arrangements are in place.
This avoids bottlenecks and last-minute delays that could impact the timely distribution of payroll, particularly if approvals are needed from multiple departments. As we approach the holiday season, it’s essential for businesses to ensure payroll processes continue smoothly. Whether your business closes or operates through the holiday period, payroll must remain seamless.
Employees still need—and expect—to be paid on time. However, managing payroll over this period can bring specific challenges. Here are ten key considerations for ensuring a smooth payroll operation during the holidays:
1. Confirm Your Closedown Period
If your business has a closedown period, notifying employees in advance is essential. Legally, employees must be informed at least 14 days before a shutdown, but giving earlier notice helps them plan and manage their time off better.
Informing your team well ahead ensures they’re fully prepared and reduces last-minute disruptions to your payroll planning. It also allows employees to clarify any questions about how leave will be handled during the closedown period.
2. Clarify Annual Leave Requirements
If employees are required to take annual leave during the closedown, communicate this clearly, including what happens if they don’t have enough leave available.
Remember, employees are still entitled to paid Public Holidays that fall within their annual leave (as per Section 40 of the Holidays Act 2003). Encouraging employees to plan their leave carefully now will help them avoid surprises and ensure they’re paid appropriately. Early conversations with employees about these details can help smooth any confusion and set clear expectations.
3. Plan for Pay Dates Over Public Holidays
If a Public Holiday lands on a normal pay date, you may need to adjust payroll processing to ensure funds reach employees on time. Although some banks process transactions on Public Holidays, it’s not always reliable.
Adjusting payroll to process earlier, if needed, ensures employees are paid on the expected date, avoiding complications with automatic payments or direct debits. This extra measure reassures employees, keeps trust intact, and prevents any potential holiday-season stress around late payments.
4. Communicate Any Changes to Pay Dates
If payroll dates need to shift due to holiday timing, communicate this to employees well in advance. Employees rely on their wages to arrive on specific dates, so it’s courteous—and practical—to inform them of any changes as soon as possible.
By being proactive with this communication, you’ll avoid a flood of enquiries from staff seeking clarity during an already busy period for your payroll team.
5. Ensure Payroll Approvals Are Handled Before the Holidays
Payroll processing can’t wait for managers on extended leave to return for approvals. Before your management team heads off on their break, confirm that all necessary payroll approvals are completed or that alternate arrangements are in place.
This avoids bottlenecks and last-minute delays that could impact the timely distribution of payroll, particularly if approvals are needed from multiple departments.
6. Check Bank File Approver Availability
Payroll depends on bank file approvers to release payments, so it’s crucial to confirm they’re available during the scheduled payroll period. If pay dates are altered, approvers need to know about these changes to be available on the new dates.
Ensuring they’re prepared and available to approve files on time prevents delays in payroll processing, so employees receive their wages as expected, even during the holidays.
7. Verify Employee Leave Entries Are Up to Date
If your business has a closedown period, check that leave requests have been entered and approved for all affected employees. If there’s no closedown, confirm that leave entries for those taking holiday leave are accurate and complete.
This prevents any last-minute requests that could lead to errors or missing information in payroll processing, keeping everything on schedule. For businesses with high demand during the holiday season, ensure blackout periods are clearly communicated to employees well in advance.
8. Coordinate Operational Coverage and Leave Schedules
During busy holiday periods, coordinating who’s available to work is critical. If multiple staff want the same time off, consider setting a policy—such as rotating holidays or giving preference to employees who didn’t take leave the previous year.
Clear policies about holiday leave expectations create a fair system for everyone and help ensure you have the staff needed to maintain operations. If you require coverage on key days, set these expectations early to avoid disappointment and ensure smooth operations.
9. Prepare for Increased Payroll Workload
Holiday payroll management often brings an increased workload due to Public Holidays, additional annual leave processing, and potential employee turnover. If the holiday season is also your offboarding period, you may face additional pressure calculating termination payments.
Be sure you have enough resources in place to manage this demand. If your payroll team is stretched, consider bringing in temporary support to manage the extra load, so your team doesn’t feel overwhelmed and processing remains smooth.
10. Plan for Payroll Administrator Leave
If your payroll administrator is taking leave, it’s vital to ensure backup support is ready to step in. Payroll is time-sensitive and can’t be delayed, even over the holiday period.
Ensuring adequate coverage for payroll during this period gives your payroll administrator the well-deserved break they need while keeping payroll operations steady. Consider cross-training additional team members if possible, so they’re prepared to manage any payroll-related issues that might arise.
