
Paying Your Staff A Christmas Bonus
A Christmas bonus for your domestic staff will always go down a treat during one of the most expensive times of the year.
If you’re planning to pay your household staff a bonus this Christmas, here’s what you need to consider:
Do I Have To Pay My Staff A Christmas Bonus?
Paying your staff a Christmas bonus is not obligatory unless there is a clause in the contract of employment that states otherwise. However, bonuses are great as a token of gratitude – and what better time to gift this than during the most wonderful time of the year?
How Much Should A Christmas Bonus Be?
A Christmas bonus is usually calculated as a percentage of your employee’s annual salary. At Stafftax we find this can vary from half a week’s pay to a full month’s pay. However, the bonus amount is entirely at the employer’s discretion.
Do I Have To Pay Tax On The Christmas Bonus?
Yes you will have to pay tax on your employee’s Christmas bonus. If you are a Stafftax client, we will display the bonus payment and the subsequent tax due on the payslip.
Can I Pay My Employee’s Christmas Bonus In Cash?
Yes you can pay your employee’s Christmas Bonus in cash if you choose to, however this must still be reflected on the payslip. A bonus is a net payment which means we would still need to calculate the Tax and NI due on top of the amount your employee receives.
Do I Have To Report Any Other Christmas Gifts I Buy For My Staff To HMRC?
Unfortunately, there isn’t a simple yes or no answer to this as it depends on the circumstances. You must report vouchers to HMRC as you will be required to pay tax on these. However, if it considered a ‘trivial benefit’ you do not have to declare this to HMRC.
Trivial benefits:
• Cost £50 or less to provide
• Are not cash or a voucher
• Are not a reward for work or performance
• Are not in the terms of an employee’s contract
How To Pay Your Staff A Christmas Bonus
Stafftax clients – if you would like to gift your staff a Christmas Bonus this year, you can submit this through your Employer Members Area in just a few clicks. From the Manage Employees tab, simply select Bonus, check whether this is a cash bonus and the amount you would like to pay. Our payroll team will reflect the bonus and any additional tax due to HMRC on your employee’s next available payslip.