Should December Payday be Early?

Many employers change their standard pay date in December so that employees get paid one or even two weeks earlier than normal. It has been seen as a benefit to employees to have their money in the bank early to help cover the cost of Christmas, but is this really the case?

Benefits of an Early December Payment

Early payment does give employees extra funds available before Christmas, which can be and expensive time of year. Many employees rely on the early payment to help them with the additional costs. In some sectors business close between the Christmas and New year period and therefore early payment prevents payroll issues arising when there is no-one there to resolve the queries, and allows managers to check that all staff have been paid before the break.

Disadvantages of an Early December Payment

January is a long month that lasts more than four weeks, so employees could find they’re having to make their money stretch for six weeks or more before they get paid again. Employees can find it a struggle to budget during the long gap between paydays, and can run out of funds before January payday arrives. Employers also have the cash flow element to consider, as funds will need to be transferred early.

Do we have a choice regarding December Pay date?

Some employers do have contractual obligations to pay employees early for the Christmas period. You will need to look at your employee’s contracts, and any common practices that you have followed over the last few years to see if there is an implied term that requires a certain pay date in December.
Employers need to take into account if the ‘normal’ payday falls on a bank holiday, as earlier payment will then be a necessity.

Communication

Communicating with employees about any possible changes is key, to allow them to make suitable budgeting plans.

You will also need to make arrangements with your Payroll provider. Your provider should be flexible with your request and be able to talk you through any actions that will be required in advance, and help you set deadlines and a schedule for the payroll paperwork.

Contact us

Contact the payroll team by completing the form on our website. Alternatively you can call us on 020 8977 3559 at our Hampton Wick office to speak to an adviser.