Every year, the time comes to prepare for the holidays. For some industries, this is where a bulk of their revenue comes from — and for good reason. While there are undoubtedly sales to be made, if you don’t have the right plan and procedures in place, you could end up costing your business.
Before the silly season, prepare and look at how your business operates before it’s too late.
Holiday payroll checklist
Having a game plan for the holidays ensures you are on the same page as your employees and ready to trade. If you aren’t on the same page as your employees, you may find yourself unprepared for the holidays or even in hot water if you are not compliant.
Breaking down your payroll into parts will help you focus and tackle your holiday budget.
Payroll Scheduling
Whether you have a weekly, fortnightly or monthly pay schedule, you must have a solid pay schedule. Consistent and recurring payroll reduces the chance of mistakes that can cost you more than just money.
For example, if you have infrequent payroll, you have more of a chance to miscalculate the pay of your employees, leading to a number of issues:
- Underpayment in wage
- Missed super
- Late payments
- Missing payments
Don’t allow poor practice in your small business; having proper procedures in place protects you and your business.
Modern awards
Most, but not all, industries have a specific award attached to the minimum wage standard for workers. The holiday season typically affects industries that would fall under an award. So, if you don’t have an enterprise agreement in place or are in an industry unaffected by awards, you need to know what your industry award sets out for your employees.
The modern awards for your industry set the minimum standards you need to follow for:
- Rates of pay
- Hours of work
- Rosters
- Overtime
- Breaks
- Penalty rates
Some work can involve more than just one award, so it is essential to be across them and have it implemented in your payroll software. It is important to note awards are minimum requirements: baselines that you can’t go below.
Overtime
As you run your payroll during the holiday season, your employees may work additional hours. Overtime rates can depend on the award or enterprise agreement with your employees. Still, generally, overtime rates apply when your full-time or part-time workers work over their contracted hours.
A common industry standard is that overtime applies when employees work over their contracted hours; the norm for full-time employees is 38 hours. The first 2 hours of overtime are generally calculated as 1.5 times the employee’s base wage, and then any hours after those first two hours of overtime are adjusted to 2 times the employee’s base wage.
Ensure you account for overtime in your payroll budget for the holidays, as overtime wages can balloon if you’re not careful.
Holiday penalty rates
Several factors go into holiday pay and penalty rates. The Fair Work Ombudsman lists the items that holiday penalty rates cover here:
- Extra pay
- A day off or extra annual leave
- Minimum requirements on shift lengths
- Substitution of a public holiday for another day.
For example, if your business operates in the retail industry, you need to know these things when rostering your workers on public holidays such as Boxing Day. Working on a public holiday comes with certain restrictions; for instance, you need to ask your employees to work on a public holiday, and they have a right to refuse if their reason is legitimate.
Only trade during public holidays if it makes sense; otherwise, you could blow out your monthly payroll budget with unnecessary opening hours.
Leave entitlements
As the holiday season approaches, you will need to review a slew of considerations before committing to your final roster for the year. Managing a workforce and their leave entitlements is part of the headache, so understanding your employees’ entitlements will help.
Leave factors to consider:
- Annual leave
- Sick and personal leave
- Parental leave
Juggling your employees’ needs is part of maintaining a healthy and positive workplace and environment. When their outside-of-work life is considered, employees are more likely to put in extra effort and accommodate you.
Rosters and timesheets
You and your employees need to know who’s working and when. When rostering for the holidays, depending on your industry and the contract agreement between you and your employees, you need to set the holiday working times well before the holiday working period. This will allow you to be ready for any changes or unexpected circumstances.
A good way to set up your employees’ working holiday roster is to draft timesheets for each employee to calculate their pay for the holiday period. Once you’ve got a working idea of your employee hours, you can set them in stone.
Trying a timesheet calculator to understand how many hours and pay each employee needs is useful. Of course, you should already have a budget for how much you need to set aside for payroll during the holidays.
Workforce Management
As an employer, you always look for ways to improve your business and operations. During the holiday season, it can be hard to step back and review how your business can improve in certain areas.
A dedicated payroll software program is a great way to automate processes and remain compliant. This removes the busy work with payroll, but you should dig deeper and truly understand how you operate.
Using workforce management tools will bring a data-focused mindset to your business. You’ll be able to track trends in scheduling, forecasts, employee performance and attendance. Using software to your advantage will pay dividends, as you can use analytics to identify and improve:
- Industry compliance
- Workplace conditions
- Reduce costs in payroll
- Improve your customer service
Refining your operations with technology will allow you to improve your business during the quieter months and prepare you for the fast pace of the holiday season.
Get ready for the holidays
Don’t get caught out by the holiday season; focus on what your business does best. Using technology and leaning on your employees will give you peace of mind and set you up for success. Plan ahead, implement your holiday payroll survival guide, and prepare for the holidays. A little preparation will help your business and allow you to enjoy and be festive this season.
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