How to Take Annual Leave Over the Christmas Shutdown Period

We don’t mean to alarm you, but Christmas is fast approaching!

While this can be a scary thought, we don’t want you pulling your hair out. All you need to do right now is think about what time you’re looking at having off, the direction to give your staff and understand how to record this in payroll.

What is a shutdown?

A shutdown period is when your business temporarily closes during slower periods of the year, particularly Christmas and New Year’s. It’s important to note that a shutdown isn’t the same as a stand down whereby employees are sent home if there’s no useful work to be completed.

What direction do I give my employees?

Before anything else, you need to work out when your shutdown period will be. Most companies take two weeks however, this is entirely up to you and your business needs.

Once you’ve worked out dates, it’s time to give direction to your employees should you have a team employed under your business. If you’re covered by a registered agreement, make sure you check the terms of your agreement here for information about when you can direct employees to take annual leave during a shutdown.

What happens when a public holiday falls during the shutdown period?

In many cases over a business’ shutdown period, there are several public holidays to consider including Christmas Day, Boxing Day, New Year’s Day and any observed days should a public holiday fall on a weekend.

When a public holiday falls during a temporary business closure or an employee has already taken annual leave, your employee’s entitlement depends on whether they’ve taken paid leave or unpaid leave.

• Public holidays during paid leave mean you’re required to pay your employee for the public holiday, which also includes any hours that fall on a part-day public holiday.

• However, employees are not paid for public holidays during unpaid leave.

Please note that the public holiday will not be counted as annual leave or sick leave, which means these hours will not be taken away from accumulated annual leave. Make sure you communicate this with your team, particularly if it’s an entry-level position!

How do I record this in payroll?

There’s a super handy leave calculator, which is a free resource for you and/or your employee to calculate how much annual leave has accumulated under your award or under the National Employment Standards (NES).

Not only have our friends over at Xero made recording this super easy for your business but we can also help with this here at Balancing Bookkeeper Canberra.

If you’d like us to handle your payroll over the Christmas period, please get in touch with us here.