So, that time of year is rolling around again. Yes, we are still a few months away, but Christmas always sneaks up on us faster than we expect! Christmas is the biggest leave processing season of the year, along with everything else that goes with it – for many, Christmas is an operational nightmare! Don’t fret, MYOB can help you navigate through the minefield that is Christmas payroll processing, so you can relax knowing that at least your payroll is under control.
There have been a few subtle changes to the way that the Holidays Act is understood and implemented, and MBIE have released their guidance on managing Holidays. This includes new updates on the treatments of employees at closedowns, and how to manage leave in days vs. the legislated weeks.
As usual MYOB is running its Annual Christmas Processing Workshops and webinars to cover off the How and Why of leave.
To give you a head start here are MYOB's top tips to make your Christmas processing easier and start planning now to take the stress out of the Christmas period.
Check your Holiday Pay setup
A month or so prior to your end of year processing, take the time to review your employee leave set-up to ensure that the leave will process correctly. Use your Holiday Pay view to check your current balances and rates for holiday pay. View MYOB's short instructional video on the Education Centre, in the videos section. Now is the time to fix it when the pressure is off! Also check anyone who has a termination value of zero (this means they have potentially been overpaid if they leave) and anyone who has no outstanding leave available for a Christmas closedown – will they earn enough in time?
Plan your time
The public holidays are mid-week this year, which can be problematic as many people process pays on these days. Plan what day you will be processing pays and communicate that to your staff. Bear in mind that your team may have payments coming out of their banks right around pay day so it’s always a good ideal to process earlier rather than later. Whether or not you have a closedown you have the option of processing your weekly/fortnightly pays each week/fortnight or will you pay for the leave period in advance so that you can have a break? Remember that if you are processing in advance updated tax rules apply for future dated leave payments so make sure you are across these changes.
Leave Paid in advance
It is very important to clarify and communicate to your employees your company policies if your company instigates a closedown and the employees are not able to work. If you have an employee without enough outstanding leave to cover a closedown period, confirm company policy around paying in advance, or whether employee leave balances must be managed to ensure enough outstanding leave to cover the closedown period.
If you do opt to pay an employee’s leave in advance, is your company policy that they will need to pay back if they leave soon after Christmas? If so, MYOB recommends getting in writing a commitment from the employee if they should depart before they have earned the leave back, you can take this out of their final pay. MYOB often sees companies pay out leave in advance over Christmas shutdown and then the employee never returns.
NOTE: this does not apply to new employees
New Employees at Closedown
Last year MBIE clarified Section 34 of the Holidays Act to confirm that all new employees (employed less than 12 months) are liable to be paid 8% of their gross, since start date, to cover all leave at closedown. It is no longer acceptable to enforce new employees taking leave in advance over this period, unless it is in addition to the 8% payment. It’s important to review how this affects you, whether your contracts cover this and to communicate this to all new employees. You can find guidance on this on MYOB's Knowledge Base, and MYOB will cover it in the Christmas sessions.
However you choose to manage your payroll processing through the Christmas period, ensure that you communicate to your team what will be happening for those few weeks.
- Closedown rules
- When is the last date for timesheets and leave requests to be approved and handed in?
- What day will pay be going through?
- If you are paying weekly pays in advance when will any catch up pays be processed?
Annual Leave cash-ups
Christmas is the time that employees may begin asking for Annual Leave cash-ups – it’s an expensive time of year for many people so an extra week of pay will go a long way!
If you’re a company that allows cash-ups then just remember you can only cash up one week of leave outstanding from previous years, and there are a few rules to abide by so check out our knowledge base or the MBIE website for more info.
If you need any assistance with any of the above, MYOB will be running Christmas seminars throughout November and December, or you can book a one-on-one session with an MYOB consultant to review your set-up and answer any queries you may have.
Want some more help?
If you want to painlessly process your Christmas leave – attend a Christmas Leave Workshop or Webinar.
Be Quick – Book Before the 31 October 2018 and Save 10%.
**This article was first published in the MYOB Exo Tips & Tricks - Spring 2018 e-newsletter, distributed 25 October 2018.