Holiday Payroll Checklist: Pay Runs, Bonuses and Leave Loading Made Simple
- johnry8
- Nov 21
- 2 min read
Updated: Nov 28
The holiday season is one of the busiest periods for Australian businesses, not just with customers but with payroll. With annual leave requests coming in, public holidays approaching and bonuses to process, employers often find themselves overwhelmed. A clear payroll plan helps you stay compliant, avoid costly mistakes and keep your team happy over Christmas and New Year.
Payroll errors often increase during the holidays, and the consequences can be expensive. Incorrect leave loading, wrong bonus tax withholding or late payments can lead to ATO penalties, frustrated staff and major admin problems when you return in January.
A solid holiday payroll checklist helps you:
Stay compliant with Fair Work and ATO rules
Pay your team accurately and on time
Avoid back pay issues and incorrect leave balances
Plan cash flow during a high expense season
Reduce manual work after the break
Your Checklist for Holiday Payroll
1. Review Leave Balances and Approvals Early
Before December gets busy, ensure all leave requests are approved and correctly recorded in your payroll system.
What to do:
Confirm staff leave dates for Christmas and New Year
Double check annual leave balances
Apply the correct leave loading percentage which is usually 17.5 percent (not applicable to everyone)
Review public holiday entitlements for full time, part time and casual staff
Tip: Communicate cut off dates for leave requests and holiday rosters to avoid last minute payroll changes.
2. Prepare for Bonuses and End of Year Payments
Many businesses give cash bonuses or incentives during the holiday season. These payments have specific tax rules.
What to consider:
Bonuses are taxed differently depending on whether they are processed as a lump sum or part of a regular pay run
Superannuation may apply depending on the nature of the bonus
Ensure the payment date falls within the correct financial year
Document clearly whether the bonus is discretionary or performance based
Do’s and Don’ts:
Do: Communicate with staff about closure dates and bonus inclusions.
Dont: Pay bonuses outside the payroll system as it creates reconciliation issues.
Tip: Many business owners underestimate the tax withholding on bonuses. Using your accounting software bonus calculator, helps avoid incorrect deductions.
3. Manage Public Holidays and Shutdown Periods
If your business closes over Christmas, payroll needs extra attention.
Checklist:
Identify the public holidays in your state or territory
Set up automatic public holiday rates for staff working on those days
For shutdown periods, confirm whether employees need to be paid annual leave or unpaid leave
Ensure your roster, award rates and timesheets align with public holiday requirements
Tip: If your business shuts down, notify employees in writing and specify how their leave will be processed during the closure.
Things to Avoid
At Rise Accountants, we notice that small and medium sized businesses often make the same mistake when it comes to holiday payroll:
Paying leave loading incorrectly, forgetting it entirely or assuming it applies to all staff
Processing bonuses without the correct tax calculation
Missing public holiday penalty rates
Misaligning shutdown dates with leave balances
Forgetting to schedule payroll to run automatically during the break
A simple check today can prevent hours of corrections in January.
Do you want a stress free December payroll and support with bonuses, pay runs and holiday leave?