The simple answer is yes.
There are many reasons why businesses wish to pay their staff early at Christmas not least being a gesture of goodwill at the holidays but perhaps you yourself are off and therefore won’t be around to set up the payments in the bank.
There are few things to remember however if you do decide to pay your staff earlier than normal.
In HMRC’s October 2024 Employer Bulletin they reminded employers of the permanent easement on reporting RTI (Real Time Information) that applies during this time. So, whilst you can pay your employees early, you still need to make sure the FPS (Full Payment Submission) reports your normal payment date. For example, if you pay your staff on the last day of the month, 31 December, but have decided to pay them on 20 December, the FPS must still reflect the payment date as 31 December.
By doing this it will protect your employees’ eligibility for income-based benefits such as Universal Credit, as an early payment could affect current and future entitlements.
Employment Contracts and Pay Schedules
In addition, if your employees are on a fixed pay schedule, i.e. weekly, bi-weekly, or monthly, paying early is generally fine as long as it aligns with the agreed upon pay periods. However, you must communicate the change in advance. You will also need to ensure the early pay date still respects any notice periods or contractual requirements outlined in your employees’ contracts.
Payroll and Taxation:
The pay still needs to follow all the necessary tax, deduction, and benefits requirements, even if it is being paid earlier than usual.
You may also need to account for any overtime or bonuses (like holiday pay) that may apply during this period.
Banking Processes:
Make sure the early payment doesn’t interfere with your bank’s processing deadlines, particularly if you’re using direct deposit. Payments made too early may not clear as expected, so check with your bank.
Holiday Bonuses or Gifts:
If you’re offering bonuses or holiday gifts, make sure you clearly distinguish these from regular pay to avoid confusion. Some businesses pay bonuses separately from the regular payslip or as part of the usual payroll.
In summary, it’s possible and often appreciated to pay employees early during the holiday season, but make sure you handle it in a way that complies with payroll rules and communicates clearly to your employees.
Here at AMR, we have a wealth of payroll knowledge and are experienced in assisting businesses wishing to pay their employees early. Please do get in touch if you require advice.
