There's no rule saying you have to pay early in December. If you normally pay at the end of the month, most businesses bring it forward to the last Friday before Christmas - Friday 18 December in 2026. If you do, report your normal payday on your Full Payment Submission to HMRC, not the day you actually paid. And warn everyone that January's payday is a long way off.
We'll be honest, we're not payroll experts and this isn't a payroll guide. But Christmas payday is one of those questions that lands on the owner's desk every December, so here's what we've learnt and what HMRC actually says.
When should I pay staff in December?
If you pay monthly at the end of the month, the usual choices are the last Friday before Christmas or the last working day before Christmas. You don't have to do either - paying on your normal date is completely fine - but most people really appreciate having their pay before Christmas, and it costs you nothing but a bit of cash flow.
| How you normally pay | Normal December payday (2026) | Common Christmas option |
|---|---|---|
| Last working day of the month | Thursday 31 December | Friday 18 or Wednesday 23 December |
| Fixed date, the 28th | Monday 28 December (a bank holiday) | Thursday 24 December, or earlier |
| Weekly on Fridays | Friday 25 December and Friday 1 January (both bank holidays) | Thursday 24 and Thursday 31 December |
Worth checking: if your payday lands on a bank holiday (and this year a lot of them do), the bank won't process it that day. Talk to whoever runs your payroll early, because the banks' Christmas cut-offs come round quicker than you'd think.
Paying staff early at Christmas: the HMRC rule
If you pay early in December, HMRC lets you put your normal (or contractual) payday on your Full Payment Submission - not the date the money actually went out. So if you usually pay on 31 December but pay on 18 December, you report 31 December and send the FPS on or before 31 December.
That's it really. Most payroll software and payroll providers know about this and handle it, but it's worth a quick check with yours if you're changing the date this year.
Why early Christmas pay affects Universal Credit
Because Universal Credit is worked out on monthly assessment periods. If someone's December pay is reported as arriving early, it can land in the same assessment period as their November pay - so it looks like they've been paid twice in one month, and their Universal Credit drops. That's the whole reason HMRC lets you report the normal payday instead.
You probably won't know who on your team gets Universal Credit, and you shouldn't need to. Just report the normal date for everyone and it's not a problem.
The long wait until January payday
This is the bit that really bites. Pay on Friday 18 December and the next payday at the end of January (Friday 29 January 2027) is six weeks away. After Christmas. With credit card bills coming in.
You don't have to fix it, but do warn people. A line in the Christmas email saying "December's pay is early, so January's going to be a long one - plan for it" saves a lot of grumbling. Some businesses offer a small advance in January for anyone who's stuck, which is a nice gesture if you can manage it - just agree how it'll be paid back, in writing.
How to tell staff about Christmas payday
Put it in the Christmas email you send in October, and again in a short reminder in early December. Three things: the date December's pay goes in, the date January's goes in and a heads up about the gap. We've got a ready-made payday email in our Christmas email to staff templates, with a Word download.
Book Time Off doesn't do payroll, we should say that straight away. What it does do is keep a proper record of everyone's leave, and the admin Reports view breaks down leave taken per person by type over whatever period you pick - with a CSV export. So if someone's had unpaid leave over Christmas, your payroll person isn't relying on a sticky note to find out.
→ Start free trialFor the rest of the Christmas plan - deadlines, who's off and the closure - see how to manage Christmas holiday requests.
The legal bit, if you need it
You don't need this to get Christmas sorted, but here's what the rules actually say if anyone asks.
- There's no legal requirement to pay early at Christmas. Pay on the date in the contract unless you choose to bring it forward (GOV.UK).
- If you pay early, report the usual payment date on the Full Payment Submission and send it on or before that date (GOV.UK, HMRC Employer Bulletin).
- A Christmas bonus is pay and goes through PAYE, with tax and National Insurance, like any other earnings (GOV.UK).
- Small Christmas gifts can be tax-free as trivial benefits if they cost £50 or less, aren't cash or a cash voucher and aren't a reward for work (GOV.UK).
Sources
| GOV.UK | Running payroll: reporting to HMRC (FPS) · Report the usual payday even if you pay early. Checked October 2026. |
| HMRC | Employer Bulletin, October 2025 · Paying early at Christmas and the RTI easement. Checked October 2026. |
| GOV.UK | Tax on trivial benefits · The £50 limit for small gifts. Checked October 2026. |
| GOV.UK | UK bank holidays · Christmas 2026 dates. Checked October 2026. |
FAQs
This is practical, general information for UK employers. If you've got a dispute brewing or something unusual in a contract, talk to ACAS (it's free) or an employment solicitor.