07 Dec Christmas Holiday Payroll FAQs
The silly season is upon us once again! To keep your payroll running smoothly these holidays, we’ve pulled together some answers to the most common questions we get at this time of year.
We’re closing down for two weeks. How do we pay for the holidays?
Technically, the law says that holidays should be paid in full before they are taken, but with the agreement of employees they can be paid out in the regular pay cycle. In practice, most companies and employees prefer to keep to their regular pay cycle. After all, having employees taking all sorts of different periods of leave could be a nightmare to maintain if not paying on a regular cycle.
Whatever your approach, ensure that the period of the pay matches the period the employee is being paid for. Don’t manually add four weeks of leave to a single weekly pay period or it will get taxed incorrectly!
In FlexiTime, the best approach is to use timesheets to record when employees are taking time off. This can be done using regular timesheet entries for ‘Employee Leave’. Alternatively you can use our Leave Requests feature.
Note that you have to give employees 14 days notice of a closedown period, so don’t wait until the last minute to tell your staff!
Can I run multiple pays in advance?
Some companies like to get their Christmas pays set up ahead of time so all they need to do when payday rolls around is finalise the pay. Or, you may be wanting to pay out an employee’s annual leave in advance.
Employees can only be in a single open pay at a time in FlexiTime. So you can’t have three separate pays open. The reason for this is that as a pay is finalised the various balances are updated for each employee, then when the next pay is created these new balances are transferred into that pay, and so on.
If you are actually paying the employees early (i.e. you’re paying for the next three pay periods now rather than sticking to your usual pay cycle) then this isn’t a problem. Just run and finalise the three pays now, all with the same pay date. They will be consolidated into a single bank batch file.
If you’re wanting to generate the pays now, but pay them in the future, you could run and finalise the three pays in advance, using the actual future pay dates, and then just upload the bank file for each pay on the pay date. Note however that the payslips will get emailed to the employees as you finalise the pays, so they will be receiving their payslips in advance.
This all works fine if your employees are paid the same amount from week to week. If you have waged employees and don’t know what their future pays are, you’re probably better to do the pays when they fall due. Luckily it’s so easy to run a pay in FlexiTime that it will only take you a few minutes!
If you really want to pay employees estimated amounts in advance and adjust their pays later, then that’s fine. When you come to do the catch-up you should create a new pay code called something like ‘Advance Pay Correction’ as gross earnings, and add this to the employee’s subsequent pay with the positive or negative adjustment hours to adjust for any difference between the hours you paid them for and what they actually worked.
And what about the public holidays?
Processing public holidays in FlexiTime is a breeze – if you’ve got public holidays set up correctly, FlexiTime will practically handle it for you.
Once you’ve created the pay you should download the Pay Leave report (that you should always run when there are public holidays or other leave to confirm how employees’ entitlements have been calculated), which will show you how FlexiTime has worked out the public holiday for each employee.
Help! How can I get hold of FlexiTime Support over Christmas?
We’ll be turning off the phones at midday on the 22nd, and you’ll be able to call us again on Wednesday 3 January. Between those dates we will be monitoring emailed support requests, so if you need help please contact email@example.com.
Wishing you all a Merry Christmas and a very Happy New Year from the FlexiTime Team.
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FlexiTime is flexible payroll software for New Zealand businesses. With online timesheets, FlexiTime makes it easy to track the hours your employees work and pay them accurately.