A Christmas payroll check list for small business

Christmas will be here before we know it, and with many businesses closing down for the festive break from Friday 18 December – it’s only a few weeks away! In the mad rush to get everything done before putting the out-of-office on your email, don’t forget to record your staff’s annual leave and public holidays to save you any headaches over the Christmas break. Payroll is a crucial area, not only for you as a small business but for your employees, so it is crucial to get it right.

Here’s a short checklist of the things you should be doing. Set aside some time in the next few days to get them done.

Public holidays

Check you have the holiday groups set correctly in your payroll software platform. This will ensure Christmas Day, Boxing Day, and New Year’s Day are setup as public holidays and normal salaries will calculate for those days. Keep in mind, if an employee is on leave and there is a public holiday during their leave period, they are to be paid the public holiday, so don’t use leave on this date.

If your staff are working on the public holidays, check your award or agreement to see how they should be treated. This should involve being paid public holiday rates or given a day off without loss of pay.

Annual leave loading

Have you checked the relevant awards and employment contracts to determine if your employees are entitled to annual leave loading? If this does apply to your staff, ensure your payroll software is set up correctly to calculate the loading on any leave taken.

Awards can be tricky and depend on your industry, and in some states what business structure you operate under, so ensure you are using the correct one for your staff.

Annual leave

If your business has a shut-down period, employees will still need to apply for leave to cover this period. Send an email out to all team members now, so that you can approve leave requests before the festive break begins. Once they have applied, you need to approve their request.

What happens to staff that don’t have enough leave? You have the option to allow them to go into negative leave or ask them to take leave without pay.

Schedule the pay run

The next step is to schedule the pay runs. If yourself of your payroll person is going to be on leave on your normal pay day, you can schedule this in advance.

Use technology to your advantage but take the time to check it is set up correctly. That way you can also relax and enjoy the festive season. Also remember bank processing times may be delayed due to public holidays, so you may want to schedule pay runs a day or two earlier if your normal pay day falls on a public holiday.

Michelle Maynard, Chartered Accountant and Partner, Carbon Group