Paying Staff Early for Christmas? Get Your FPS Date Right
Updated: 2 days ago
Plenty of employers around Bury and the wider Greater Manchester area close for the holidays and pay staff a few days early in December, so wages land before everyone goes off for Christmas. HMRC's October 2026 Employer Bulletin has a timely reminder for anyone doing this: the date you actually pay isn't the date that should go on your payroll submission.
It applies whether you pay weekly, fortnightly or monthly, and whether you run payroll yourself or use a bureau. Most employers get this right without thinking about it, but it's easy to catch out when December plans shift and pay runs get rearranged at the last minute.
Report the Normal Payday, Not the Date You Pay
If your contractual payday falls on, say, 31 December but you're actually paying staff on 15 December, your Full Payment Submission (FPS) should still show 31 December as the payment date. HMRC's guidance is to report the normal or contractual payment date, not the date you actually paid, and to submit the FPS on or before that normal date. This comes up every December and isn't new for this year, but it's an easy one to overlook when you're focused on getting everyone paid before the office shuts.
Why the Date on the FPS Matters
The reason HMRC is strict about this comes down to Universal Credit. A claimant's UC award is calculated from the earnings reported to HMRC within each monthly assessment period. If you report the early payment date rather than the normal one, two paydays can end up falling inside the same assessment period. That can look like a sudden jump in income, which may reduce or even stop someone's Universal Credit for that month, with a gap the following month when no payment is reported at all. None of that reflects what's actually happened to the employee's income; it's a reporting-date problem, and it's one that's entirely avoidable.
Getting Your Payroll Software Set Up
Most mainstream payroll software, Xero, Sage, BrightPay and QuickBooks among them, lets you set the payment date separately from the date you actually run payroll, so you can pay early without changing what's reported. The main risk is simply forgetting to check it, and it's worth checking every year, since a software update or a change of provider can sometimes reset it back to the actual pay date by default. If you're planning an early December pay run this year, it's worth flagging now: tell whoever runs your payroll well ahead of time, confirm the software is set to report the contractual date, and let staff know their official payday isn't changing, even though the money will land sooner. If you'd like us to check your payroll and auto-enrolment setup before your December run, we're happy to take a look.
A Few Other Things From This Month's Employer Bulletin
While you're thinking about December payroll, a couple of other points from HMRC's October bulletin are worth a glance:
PAYE Settlement Agreement payments for 2025/26 were due by 22 October, using your PSA reference rather than your usual PAYE Accounts Office reference. If you haven't paid yet, it's worth sorting promptly to avoid interest.
If you use subcontractors, remember to verify them before their first payment, and again if they haven't appeared on a return in the current or previous two tax years, using the correct deduction rate.
HMRC has updated its guidance on tax-free welfare counselling (EIM21845) to add examples covering mental health and menopause support. The exemption is still tightly drawn, financial, tax and legal advice are excluded, but work-related counselling support for staff can often be provided without creating a taxable benefit.
Need a hand with this? We're accountants in Bury, and our payroll service covers it for a fixed fee.
Talk it through with us
If any of this affects your December payroll, book a free, no-obligation 30-minute chat by phone, Teams or at our Bury office, or see your fixed fee online in 2 minutes. Prefer to talk now? Call 0161 327 0047.
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