For many companies, Friday is often Payday. However, this holiday season, both Christmas and New Year’s Day fall on a Saturday. Banks traditionally observe all federal holidays. This holiday season, Christmas is observed on Friday, December 24th and New Year’s Day is observed on Friday, December 31st

A bank holiday can put a wrinkle in your payroll processing timeline and desired payday date. If a payday falls on a bank holiday, your employees have to wait until the next business day to access their wages unless payroll departments take action. 

Say your company typically pays employees on Friday. Because of the observance of Christmas and New Year’s on Fridays, employees may not be able to access their funds until Monday, depending on their payment method.

Many companies think Direct Deposit is the answer.  The American Payroll Association states 93% of U.S. workers receive their pay by Direct Deposit.  Companies using Direct Deposit have money transferred from their business payroll account to their employee’s accounts through the Automated Clearing House (ACH).  ACH is the electronic network that handles all Direct Deposit transfers.  It is important to note, ACH only processes Direct Deposit transfers Monday through Friday excluding weekends and holidays.  If there is a holiday on the anticipated ACH transfer date, the transfer will not happen until the next business day.  If payroll departments are not prepared, employees would not get paid until the following Monday two weeks in a row.

What should payroll departments do?

There are four options employers have for handling payroll when payday falls on a holiday:

  1. Run payroll like normal and employees get paid after the holiday. While a viable option, this does not make your company an Employer of Choice.
  2. Run payroll earlier so employees get paid before the holiday.
  3. Run payroll normally and cover expedite fees so employees are paid before the holiday.
  4. Offer Pay on Demand services so employees can get access to wages already earned. This way you can run payroll as normal, employees can get their wages earlier and there are no additional fees to the employee or employer.

How Can We Help?

If we are not your current payroll provider, check with your current provider on options available. If you would like to see a demonstration of our Integrated Payroll and HCM systems, contact Time Equipment Company at or 800-997-8463.


*This document simplifies complex information as it is understood by Time Equipment Company. It is not to be taken as legal advice. The guidelines are consistently changing. For further information, please visit