What Happens When Payday Falls on a Holiday or Weekend?

As a business owner, paying your employees on time is one of your greatest responsibilities. Your staff works hard and they depend on timely compensation to pay their bills and save for the future. 

Ensuring on-time payment is best achieved through well organized payroll processes and keeping track of upcoming paydays that happen to fall on a holiday or weekend. Failing to prepare for these occurrences can lead to delays in payment, which can hurt worker morale and productivity.  

But you’ll be happy to know that there are a number of smart ways to avoid such payment stumbling blocks, and this informative guide will help you stay on track. 

How Do Holidays and Weekends Affect Payroll Runs?

Holidays and weekends tend to affect payroll in different ways. Let’s take a look at some of the main concerns and hurdles. 

To clarify, this guide does not address the issue of holiday pay, such as how to pay employees who work on Memorial Day. 

Holidays

Payroll processes almost always involve banks, which are closed on most public holidays (listed below). If your pay date falls on a holiday, your employees may experience a delay in accessing their funds, especially if they rely on direct deposit. In most cases, wages will be available the next business day after a bank holiday, though in some cases the delay could be longer.

If you use a payroll service provider, they may also observe the holiday, which could cause an additional delay. Most providers alert their clients of any upcoming holiday-payday conflicts and move up their deadlines for receiving payroll details. 

However, it’s ultimately up to the employer to appropriately adjust your payroll cycle.

Weekends

As with holidays, banks will not make payments over the weekend. Businesses with semimonthly pay schedules will run into this issue more than those on biweekly schedules, which pay out on a specific day of the week, rather than on regular monthly dates. 

Your chosen payroll service provider may not process payroll over the weekends either. A common workaround for this issue is to pay employees on Friday when the pay date falls on Saturday, and on Monday when the pay date falls on Sunday. 

Handling Payroll Dates That Fall On Weekends or Holidays

When it comes to handling payroll for a pay date set to fall on a weekend or holiday, you have several options. Here are some of the actions you could take. 

Run Payroll Ahead of Time

Processing your payroll a day or two before you normally would is likely your best bet. This will of course mean adjusting your payroll cutoff dates in advance. But this will ensure your employees receive their payment, whether via paper check or direct deposit, without delay.

If you do shift your payroll processing schedule, make sure your accounting and HR teams are made aware of the changes. Payroll tends to have a lot of moving parts, so if timesheets and other documents have yet to be prepared and approved, you could face a significant delay. 

Expedited Processing

If you’re using a payroll service provider, you may be able to expedite payroll processing without any drastic changes to your schedule. For example, if your standard deadline for submitting payroll to your provider is three business days prior to pay date, you may be able to pay extra to expedite it to same-day or one-day processing. 

With this option you’ll be able to pay employees before their usual pay date even when you fail to notice the pay conflict on the calendar in advance. The downside, of course, is the extra cost. Still, it’s a good option to have in your pocket when you need a quick fix. 

Run Payroll As Usual

If you don’t take action to adjust your payroll schedule ahead of a holiday or weekend, your employees will likely receive their paychecks late. This could result in disgruntled employees, as getting payment later than anticipated can upset their budgeting and bill payment plans.  

There are no laws against failing to pay employees ahead of a holiday or weekend, but there are laws in place that require businesses to keep their payroll consistent. 

Your state may have its own laws when it comes to payroll frequency. Be sure to pay close attention to them so you know how to comply when pay dates fall on a bank holiday or weekend. 

Aside from keeping your business in good standing with the law, paying your employees in advance of bank holidays and weekends, rather than after them, is likely to keep morale high – and happy employees are productive employees! 

List of Major US Bank Holidays

To keep track of United States bank holidays that could affect your payroll runs, here’s a list of the major dates:

Holiday	Date
New Year’s Day	January 1
Martin Luther King Jr Day	Third Monday in January
President’s Day	Third Monday in February
Memorial Day	Last Monday in May
Juneteenth	June 19
Independence Day	July 4
Labor Day	First Monday in September
Columbus Day	Second Monday in October
Veterans Day	November 11
Thanksgiving Day	Fourth Thursday in November
Christmas Day	December 25

Payroll Processing Tips For Weekends and Holidays

The best way to stay on top of upcoming pay date conflicts is to be prepared. Here are some helpful tips:

• Follow A Set Payroll Schedule – One of the best ways to account for payroll interruptions due to weekends and holidays is to create a payroll schedule way in advance. Create the year’s payroll schedule towards the end of the previous year and adjust processing cut-off dates accordingly. 
• Communicate with Employees – Send the year’s payroll schedule to all employees so they know exactly when they will be paid. Make sure the staff responsible for payroll processing is aware of the schedule as well so nothing falls through the cracks. 
• Set Reminders – You can never have too many reminders when it comes to running payroll! Make use of calendar reminders on your phone or computer or keep the dates front and center at your workspace.

Following these simple steps should provide peace of mind about on-time employee compensation. 

Summary

Bank holidays and weekends can throw a wrench in your company’s payroll schedule, but fortunately, there are workarounds. If you make adjustments to your payroll, be sure to keep your employees top of mind. 

Getting paid on time is fundamental to a positive employee experience. Responsible payroll scheduling will help you stay in legal compliance and pay your staff on time – and keep your business on the right track.