Managing holiday payroll this Christmas – how to set and forget

It’s the most wonderful time of the year; the festive season is nearly here, and we’re looking forward to a few days of R & R (along with some good food!) before we jump into 2024.

However, as an accountant, bookkeeper or bureau it can also be a stressful time, making sure that employees are getting paid correctly according to public holidays, annual leave, bonuses and more.

That doesn’t mean you can’t take a break – with a bit of pre-planning and some savvy technology, holiday payroll can be a breeze.

Our blog explains some of the best ways you can take the weight off.

1. Start by assessing

It’s important to start on the right foot. Pnina Bastin, ANZ Payroll Product Owner at Employment Hero, says “Before you start preparing your pay runs for the Christmas period, have a look around your platform to ensure that everything is set up correctly.  “Do a mini-audit. Are your employees attached to the correct leave template? Are public holidays and the days which are Mondayised and Tuesdayised set up to be paid automatically? Has everyone submitted their leave and has it been approved?”

Check in with your clients to make sure that any information you keep is accurate and up to date, so there’s no errors further down the line. This is one of those tasks that seems time-consuming but really is essential, and you’ll always be glad that you double-checked your data.

2. Ensure public holidays are covered

Make sure that your payroll software is configured to calculate public holiday pay for Christmas Day, Boxing Day, New Year’s Day and the 2 January holiday. It should also be ready for any closures or leave taken.

As Pnina says, “with Christmas nearly upon us, my word of advice is ‘preparation is key’. Company closures, employee annual holidays and public holidays (Mondayisation and Tuesdayisation) all need to be recorded and it’s crucial to get it right.”

For example, with Employment Hero Payroll, users can set up Otherwise Working Days in the system, so Employment Hero will automatically pay employees at the correct rates for public holidays. If they work a public holiday, the system will pay time-and-a-half, and if they don’t they will be paid according to New Zealand legislation. This means less time spent on manual processes – which also means more time to spend with family and friends over the festive break!

It’s important to note that if an employee works on a public holiday – and public holiday rules have been configured – they will still need to submit a timesheet in order to be paid the correct rate. For Employment Hero users, this is something employees can do through the Clock Me In feature.

3. Approve annual leave

Many employees may want to take leave during the festive period, so it’s important to take into account different leave entitlements and balances for each employee. Some may be using their entitled leave, while others may be using leave in advance.

A smart payroll software will ensure everyone’s leave balance is up to date, so that the correct amount of leave is applied for. Here at Employment Hero, our leave management features ensure that measuring leave balances is super easy for everyone, whether that’s a payroll professional or their client.

According to Shelley Costello, NZ Payroll Product Specialist at Employment Hero,

“Don’t fall into the trap of paying out all of your employee’s accrued leave (leave they haven’t yet become entitled to). Remember if they terminate, this is paid out as 8% of gross earnings since their last anniversary and if they have taken a lot of unpaid leave this could lead to the employee owing you money, without enough in their final pay calculations to cover this.”

4. Process bonuses and leave in advance

Processing lump sum payments such as commission, bonus and back payments can be done so by aggregating the tax across a number of pay periods. If you’re paying staff an end-of-year bonus or leave in advance, make use of payroll software and get your calculations right.

With Employment Hero, organising and processing these lump sum payments can be done in just a few checks. Check out our support article for an inside look.

5. Schedule pay runs over the break

Work smarter, not harder! Harness the power of automation to free up time and allow you to enjoy a break over the end of year period. With Employment Hero Payroll, you and your clients can configure tasks to run automatically, such as:

• Payroll calculations
• Importing timesheets
• Publishing pay slips
• Payday filing

Choose what needs to be automated, and set a schedule to pay this in advance over the break. This feature isn’t just handy for the festive period, but will also save time and reduce manual effort in each and every pay run.

Pnina also has the following tip for employers – “If you have a pay run which is due to be paid over the Christmas period, my recommendation is to pay on the last business day before the public holiday. If your employees are happy with being paid after the public holidays, that’s fine but you will need to have had a discussion with them.”

6. Set deadlines for clients and their team members

Finally, make sure all your clients are aware of what needs to be completed for successful payroll processing over the holidays. That could include things like submitting leave requests in advance or filling out timesheets during public holidays. As much as you can automate loads of the payroll process, there will be some elements that require manual input by others.

Get ahead and send out really clear communications in advance, highlighting important due dates and responsibilities. Consider automating email reminders for really crucial tasks if needed, so that even if you’re off on holiday, your clients are across what they need to do.

Prepare for the holidays with Employment Hero

As Pnina says, “Remember, payroll specialists are not superheroes. If you need help, please ask.” 

The festive season doesn’t have to be painful; preparation is key. Making sure that your software can handle complex payroll scenarios, public holidays, annual leave and automated pay runs will make the end of year process as smooth as possible.

From all of us at Employment Hero to you, we wish you a safe and restful holiday break – and we look forward to seeing you in the New Year!