Early Christmas PAYE Reporting
During the Christmas period, many businesses close for several days or even weeks, prompting them to process payroll ahead of schedule. This change allows employees to receive their wages before the holidays, easing financial pressure.
However, paying early does not mean reporting early. The process for reporting PAYE remains the same, regardless of when employees receive their wages.
Reporting PAYE for Early Christmas Payments
When you decide to pay employees before the usual payday, you must report the normal or contractual payday on your Full Payment Submission (FPS), rather than the actual early payment date. Let’s break down the process:
- Report the Normal Payday: Suppose the regular payday is 27th December 2023, but due to Christmas, you pay employees on 17th December 2023. You must still report 27th December 2023 as the payday on your FPS.
- Submit FPS on or Before the Normal Payday: Even though you made the payment on 17th December, submit the FPS to HMRC on or before the regular payday (27th December in this example).
Following these guidelines ensures that the reported payday aligns with the normal schedule, keeping your PAYE submissions consistent with HMRC’s requirements.
Employees Receiving Universal Credit
Universal Credit calculations are based on the earnings reported in each assessment period. Incorrectly listing the actual early payment date instead of the regular payday can affect an employee’s Universal Credit entitlement.
Additional PAYE Reporting Obligations
The flexibility for early Christmas payments does not change the core PAYE reporting requirements. Employers must still:
- Submit PAYE information on or before the reported payday, regardless of the actual payment date.
- Adhere to regular PAYE rules outside of the festive season. The early payment rule applies specifically to Christmas and does not cover other times of the year.
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