Did You Pay Holiday Bonuses to Employees in 2016?

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Did you offer holiday pay to your employees recently? This benefit is not required by law, but many businesses choose to offer paid holidays to staff members. The holiday season is a great time of year to show your generosity and appreciation for your team and their families, and holiday pay is a great way that you can show your gratitude to hardworking employees.

Did You Setup the Holiday Pay Correctly?Holiday Pay Options for Small Businesses

If you paid employees for a holiday, you probably used one of two methods. The first option is to pay a bonus if employees work on holidays. For example, if an employee worked a shift on the holiday, they might have been paid double time or time and a half.  Another option is to pay the regular daily rate and give employees the day off.

Regardless of whether or not your business was open on a holiday, there are payroll implications. Industries that can close business doors on the holiday often send employees home to spend the holiday with family members. Even though the employees aren’t working, they still get paid holiday hours for the time.

Exempt Employees and Holiday Hours

Do you have exempt employees on the payroll? It is required that you still pay the full salary, even if they used time off for a holiday. Legally, you may not reduce the salary paid when the employee takes time off in this manner.

On the other hand, a guaranteed paycheck is not required for nonexempt employees. These people are paid a certain amount for each hour worked. You can choose how you want to handle paychecks for nonexempt employees.

Paycheck Management for Holiday Pay

Instead of simply adding on regular hours for a holiday, it is important that you distinguish this amount from the regular time worked. Most payroll systems will let you enter in the holiday hours separate from the regular time card. If you are unsure how to do this on your employee’s paychecks, then you should talk to your payroll company for more information.

Do you need more information about holiday pay or payroll management? If so, we invite you to get in touch with us at R&R Payroll & Bookkeeping Services. Contact us to learn more: (951) 296-0412. We’ll be glad to help.