December is one of the busiest months of the year for Australian businesses. Between end of year functions, seasonal staff finishing up and the countdown to the Christmas break, payroll can easily slip down the to do list. The catch is that your obligations to your employees and the ATO don’t take a holiday.
With Payday Super now in place and public holidays falling across some of the busiest pay weeks of the year, a little planning in November can save a lot of stress in January. Whether you run a hospitality venue, a commercial cleaning business or a farming operation, here is what to have on your radar before you close for the break.
Plan your pay runs around the public holidays
This year Christmas Day falls on Friday 25 December and Boxing Day on Saturday 26 December, with an additional public holiday on Monday 28 December in most states and territories. New Year’s Day follows on Friday 1 January 2027. Banks don’t process payments on public holidays, so a pay run scheduled for one of these days may not reach your employees on time.
Review your pay calendar now and adjust payment days accordingly where needed. Let your team know about any adjusted pay dates and make sure timesheets, approvals and bank authorisations are sorted before key people head off on leave. Public holiday arrangements vary by state, so confirm the details for your location.
Get public holiday pay rates right
Employees who would normally work on a day that falls on a public holiday are generally entitled to be paid for their ordinary hours if they have the day off. Employees who do work on a public holiday are often entitled to penalty rates under their award or agreement, and these can be significant in industries like hospitality and commercial cleaning.
Check that your payroll software has the correct pay items set up for public holiday work, and finalise Christmas rosters with enough time to process them accurately. Casual, part time and full-time employees can all be treated differently, so it pays to review the relevant award before the first public holiday rather than correcting underpayments after the fact.
Shutdowns and annual leave
Many businesses close between Christmas and New Year. Most modern awards allow employers to direct staff to take annual leave during a shutdown, but there are usually notice requirements and other conditions to meet. Review your award early so you can give your team the right amount of notice. Think about how you will handle employees who don’t have enough leave accrued, whether annual leave loading applies, and how leave taken over the break will be recorded in your payroll system.
Accurate leave balances matter for your employees and for your own reporting. If you are unsure what your award allows, the Fair Work Ombudsman is a good starting point, and we can help you set things up correctly in your payroll software.
Christmas bonuses
End of year bonuses are a great way to thank your team, but they need to be processed correctly. Bonuses are subject to PAYG withholding, and super is generally payable on bonuses that relate to ordinary hours of work. Run bonuses through payroll rather than paying them separately so they are reported through Single Touch Payroll (STP).
Payday Super and the holiday period
From 1 July 2026, Payday Super changed the way employers pay superannuation. Instead of paying quarterly, super must now be paid at the same time as wages, with contributions required to reach your employees’ super funds within seven business days of each payday. This means the Christmas break no longer offers a quarterly buffer. Every pay run you process in December, including brought forward pay runs, bonuses and final pays, creates its own super deadline.
Banks, clearing houses and super funds may also take longer to process payments over the holiday period, so allow extra time. Make sure your payroll software is set up to pay super with each pay run, and check the ATO’s latest guidance before the break.
The ATO has some great resources to help you understand Payday Super: ATO Payday Super resources
Keep your BAS due dates in view
Payroll and BAS go hand in hand, with the wages and PAYG withholding amounts from your pay runs flowing through to your activity statement. For quarterly lodgers, the October to December BAS is generally due on 28 February 2027. Monthly lodgers have their November BAS due on 21 December, with the December BAS due on 21 January.
Lodging through a registered BAS agent may give you additional time on some lodgements. Clean payroll records in December make your next BAS far simpler, so reconcile wages, withholding and super before you close for the year. You can view the full list of due dates on the ATO website.
Set calendar reminders for lodgment key dates: ATO BAS due dates
How T3 Partners can help
Holiday payroll doesn’t have to be stressful. As registered BAS agents, we help businesses across cattle farming, sugar cane farming, commercial cleaning, hospitality and the not for profit sector stay on top of their payroll, super and BAS obligations. We can review your holiday pay calendar, check your public holiday and leave setups, process bonuses and final pays, and make sure super is paid on time under Payday Super.
Get in touch before December so everything is in place well before you close for the break, and you can enjoy the holidays knowing your payroll is taken care of.