I have mentioned this before however I now have another client asking me to do the same.
If a payroll client gave you the staff hours for the week to process and said one member of staff was taking a holiday for 2 weeks, would you pay them 2 weeks holiday in one week or would you process this weeks as a holiday and next week as a holiday?
I find with clients they think that if you process a 2 week holiday in one week and then process 0 hours for the following weeks that employees are getting 'free money' in the form of a tax rebate. However I always try to explain that over the course of the year it works out the same amount of tax on their tax code regardless of whether you process 2 weeks all at once or spread it out?
Under RTI what would be the right way to go about this?
Depending on how they were usually paid, you would probably pay 2+1= 3 weeks at once.
Use the Advance Pay option and choose category, type, number of weeks and amounts. In all the payroll programs I've used, you're not asked to process the employee again until the pay day after their return. The NI deductions will be correct and no tax refunds generated over the course of their holiday.
I have advanced the holidays however I think I've made a mistake somewhere. The processing date is 26th August for the week ending 25th August. I have advanced the pay by 3 weeks which means these employees have now been updated to the 16th September. This should have been the 9th. When doing advanced pay for holidays do I just advance it for the 2 weeks as their normal week wage is already in the system?
