Payroll in December: Key Considerations for Employers

December is one of the busiest months of the year for Irish employers, and payroll is no exception. With bank holidays, seasonal bonuses, gifts, and early pay requests, it’s essential to plan ahead to ensure compliant and accurate payroll processing. Employers must also be mindful of statutory obligations, Revenue requirements, and the upcoming introduction of auto-enrolment.

To help you stay organised and compliant, this guide outlines the key payroll considerations for December to help ensure you avoid delays, penalties, and year-end frustrations.

 

1. Don't Miss Deadlines

Employers should submit payment files to their bank well before the bank's cut-off times during December to account for bank holiday closures and ensure wages reach employees by the contractual pay date. 

Under employment contracts, wages must be paid on the agreed date. Employers are responsible for ensuring this occurs, even during the festive season, by planning ahead with their banks and adjusting payment submission dates accordingly.

 

2. Plan Payroll Around December Bank Holidays

• Christmas Day – 25 December
• St Stephen’s Day – 26 December
• New Year’s Day – 01 January

These closures affect banks, Revenue systems, and payroll timelines. Employers should:

• Identify if a normal pay date falls on a bank holiday.
• Where employees are paid by bank transfer, arrange for funds to reach employees on the last banking day before the bank holiday.
• Move payroll processing forward if necessary to meet this earlier banking deadline.
• Notify employees in advance if the date on which they receive their pay will change.

 

3. Bonus Payments

• All cash bonuses are subject to PAYE, USC and PRSI.
• Ensure these payments are processed correctly within payroll and reported to Revenue in real time.
• Consider whether the timing of bonuses impacts employees’ tax bands for year-end.

 

4. Gifts & Benefits-in-Kind (BIK)

Non-cash gifts provided to employees may attract BIK taxation unless they qualify for the Small Benefit Exemption. From 2025, employers can provide up to five non-cash benefits per employee per year (such as vouchers, gift cards, or product-specific gifts) with a combined value of up to €1,500 without triggering BIK taxation.

These must be strictly non-cash and cannot be exchanged for money. If a single gift exceeds €1,500, the entire value becomes subject to payroll taxes.

Employers must report gifts under this exemption to Revenue in real-time (Enhanced Reporting Requirements) on or before the payment date.

Track all gifts carefully to ensure compliance and avoid creating unintended tax liabilities.

Using the SBE strategically can reward employees while minimising tax costs for both employer and employee.

5. Prepare Payroll for the introduction of Auto-enrolment in Ireland

1. Register for the MyFutureFund Portal
2. Communicate the upcoming change to staff
3. Review your payroll software to ensure it is ready for the new year

 

6. Can You Pay Early in December?

• Revenue treats pay as received on the actual date it is paid to the employee.
• Employers must not combine December payments with January payroll.
• PAYE, USC and PRSI should be calculated as normal for the December pay period.

We Can Help with Payroll

 

Updated 16 Dec 2025 | Published 16 Dec 2025

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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