When will daily pay be fixed

You can move your payday to a different day or change how often you pay your employees.

Moving your payday

If the new payday is in the same tax month or week, treat the first new payment as an extra payment for that period.

You do not need to do anything special when recording pay if the new payday is in a different tax month or week.

HM Revenue and Customs (HMRC) has guidance on how to calculate National Insurance for your employees after changing paydays.

Changing how often you pay your employees

You must contact the employer helpline if you pay employees less often so HMRC do not send you a non-filing notice through PAYE Online.

Most payroll software can automatically manage any changes to how often you pay your employees (for example from monthly to weekly) and work out deductions correctly.

There are some limitations on when you can make these changes if you use HM Revenue and Customs’ (HMRC) Basic PAYE Tools.

Paying your employees more often

If you’ve not already paid your employees, use the new earnings period (in the ‘Pay frequency’ field) in your Full Payment Submission (FPS) when you next pay them.

If you’ve paid your employees, you can use the new earnings period from the next tax month.

Paying your employees less often

If a payment from your old pay period also takes place in your new pay period, calculate and deduct National Insurance on both. Do not deduct more National Insurance than would’ve been due on the combined total of both payments.

If an employee also joins your contracted-out pension scheme during this period, deduct National Insurance at the contracted-out rate on the total of both payments.

Deduct tax based on the new earnings period the next time you pay your employees.

Annual payroll scheme for PAYE

If you pay your employees only once a year, and all in the same tax month, you can register with HMRC as an ‘annual scheme’.

This means you send reports and make payments to HMRC annually. If you pay your employees on different days in the same tax month, you need to send an FPS on or before each payday. You do not need to send an Employer Payment Summary (EPS) for the months when you do not pay your employees.

To register, contact the employer helpline and tell them which month you pay your employees. You’ll need your 13-character Accounts Office reference number - this is on the letter HMRC sent you when you registered as an employer.

Changing when you pay your employees

If you change the month you pay your employees, send an FPS in the month that you want the new annual payment month to move to. If it’s later than the month you usually pay your employees, you’ll need to send an EPS for that month to tell HMRC you’re not paying anyone.

Example

If you usually pay your employees in August but want to change to September, send an EPS in August and an FPS in September.

If you send more than one FPS in a year, HMRC will assume you no longer wish to operate as an annual scheme and send you a letter to confirm.

To make sure your first pay is paid on time, you need to give your employer all the right details, such as your IRD number, KiwiSaver information (and your bank account number if that’s how you will be paid) so that they can pay you.

If you don’t think you’re getting paid the right amount or on time, you should talk to your employer and ask them why. If you’re not happy after that, contact us for advice.

Pay day

Employees are usually paid on a regular day each week, fortnight or month. For example your pay day might be every Thursday, or every second Wednesday. The law doesn’t say how often an employee should be paid or what day they should be paid on but this is included in most employment agreements. If your pay day isn’t included in the employment agreement that your employer offers you, you should ask your employer how often and when you will be paid before you sign it and ask for it to be included so that there is no confusion. Employers need to consider their good faith obligations and be reasonable when deciding how often their employees will be paid.

Pay period

• The pay period is the time period that you have been paid for in your pay. If you’re paid on a fortnightly basis your pay period would be 2 weeks.
• For employees who receive wages, you will usually be paid after the pay period. For example, Mike is paid on a Monday, for the pay period from Monday last week, until the Friday last week.
• For employees who receive a salary, they may be paid before the end of the pay period. For example, Shanti is paid fortnightly, in the middle of her pay period. This means Shanti is paid one week in advance (ie before she does the work related to one week of her pay), and one week in arrears (ie after she has done the work related to one week of her pay).

Timing of the payment

Pay for annual holidays

• If you take annual holidays, you must be paid for all of the holiday before the holiday starts unless you agree to be paid in your normal pay payment pattern. You and your employer should agree to this in writing to make sure you both understand.
• If your employment is ending, your employer must pay your holiday pay in your final pay.
• If you work so irregularly or intermittently that it isn’t practical for you to get 4 weeks off on annual holidays, or if you are on a fixed term agreement of less than 12 months, you may agree with your employer to get 8% of your gross earnings as holiday pay with your regular pay instead of taking holidays. If you agree to this, it must be recorded in your employment agreement and recorded as a separate identifiable item in pay records (and should show in your payslip).

Pay for public holidays

You must be paid for public holidays in your pay for the pay period in which the public holiday falls if it is an otherwise working day for you. (If you work on a public holiday you must be paid at a rate of at least time and a half).

Employment legislation does not stipulate when a regular ‘pay day’ should be, or how often these should occur.  Often, an employment agreement will cover when payments will be made.  If your pay day occurs on a public holiday, you should check your employment agreement, or ask your employer if they have made any arrangements to pay you prior to the public holiday.  Many employers have arrangements in place to ensure payments are made prior to the public holiday.

You should also note that if you are paid through internet banking, there can be delays between your employer making the payment and the money being received in your account, particularly if you use a different bank than your employer.

Pay for sick or bereavement leave

You must be paid for sick or bereavement leave in your pay for the pay period during which you took leave, and at the rate you would usually be paid for that day. If your employer requires you to prove you were sick then they don’t have to pay you sick leave until you have given them the proof.

Pay for alternative holidays

You must be paid for any alternative holiday you take in the pay for the period that the alternative holiday was taken. If you haven’t taken an alternative holiday that you are entitled to, when your employment ends you must be paid it out in your final pay.

Employees may notice that on certain days, their Available Balance changes without having made any transfers. The reason that your Available Balance may change is due to DailyPay's Rolling Balance feature. This feature allows you to access up to two pay-period's worth of pay.

For a period of time (usually one day due to payroll processing), you will have access to an Available Balance that provides pay based on earnings from BOTH Pay Period A and Pay Period B. However, when payroll processing for Pay Period A begins, the Available Balance will change to reflect only pay from Pay Period B. This is why some employees see a decrease in their Available Balance amount overnight without an activity.

Please refer to the graphics on the right for more.

There are a few different reasons as to why your Available Balance might not be updating:

• Your earnings have not been reported.

  • You can see the timing most recent Available Balance update underneath the Available Balance Amount at the top of your DailyPay portal. If your Available Balance doesn't reflect your earnings from the previous day, please contact your employee support.

• Your account is in review.

  • You will receive an email alert if your account falls into review. This can happen for many reasons, such as incorrect banking information, incorrect earnings reported, and unpaid PTO. Your account will be removed from review and you will be notified once it has been by our Employee Support once the issue has been fixed. You can contact Employee Support at (866) 432-0472.

• Your account has a negative balance.

  • If your account goes into a negative balance, you will be alerted upon opening the DailyPay portal. Depending on which option you choose to repay, your Available Balance and Remainder Paycheck will reflect the deductions amounts needed to repay the over-drafted amount. If you have questions about your negative balance, you can contact Employee Support at (866) 432-0472.