Some employers need to pay their employees earlier than usual over the Christmas period. This might be because the business is closed or, if the business stays open, because key staff will be absent during the festive season.

Regardless of why it occurs, it is important that any PAYE information submitted in December includes the usual payment date. Reporting the payment as occurring on the actual, earlier date of payment can cause problems for any of your staff who claim Universal Credit. Accordingly, HMRC allow employers to report slightly differently in this month.

For example, if an employer pays their employees two weeks early on Friday 13 December 2024, when the normal (or contractual) payment date would have been Friday 27 December 2024, then the employer should report the payment date on the Full Payment Summary (FPS) as 27 December 2024. The employer should also ensure the submission is sent to HMRC on or before 27 December 2024.

Doing this will help to protect employees’ eligibility for Universal Credit, as otherwise the accelerated payment date could affect their current and future entitlements. This is because the ‘assessment period’ over which an individual’s income is assessed for Universal Credit is not necessarily a calendar month. Moving the pay day could mean that some employees end up with two payments in one assessment period and none in the next, which can mean their award is withdrawn one month and then increased the next. 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.  

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