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Timing the Reporting of your Employees' pay at Christmas

HMRC has issued guidance on when to report payments made to employees in avoid causing benefits issues.

This is because many employers pay staff early due to the bank holidays, but if they are reported early, this could mean staff receiving more than one payment within a period of a month, so adjustments are needed to avoid the problem. They say:

"We would like to remind employers of the permanent easement on reporting PAYE information in real time which has been in place since 2019. We are aware some employers pay their employees earlier than usual over the Christmas period. This can be for a number of reasons. For example, during the Christmas period the business may close, meaning workers need to be paid earlier than normal.

If you do pay early over the Christmas period, please report your normal (or contractual) payday as the payment date on your Full Payment Submission (FPS) and ensure that the FPS is submitted on or before this date.

For example, if you pay on Friday 17 December 2021 but the normal (or contractual) payment date is Friday 31 December 2021, please report the payment date on the FPS as 31 December and ensure the submission is sent on or before 31 December 2021.

Doing this will help to protect your employees’ eligibility for Universal Credit, as reporting the payday as the payment date may affect current and future entitlements.

The overriding PAYE reporting obligation for employers is unaffected by this easement and it remains that you must report payments on or before the date the employee is paid, that is payday."

If you have any queries, please speak to your payroll provider.
Posted on 16 Nov 2021
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