What Happens if Payday Falls on a Bank Holiday?

What Happens if Payday Falls on a Bank Holiday?

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To know what will happen if your payday falls on a bank holiday, there are two things you should do:

1) Find out what the holiday policy is at your bank, and 2) Ask your HR rep how your employer handles paydays that fall on holidays.

Holiday policies vary by company. But here’s a quick guide: If payday falls on a weekend, your payroll department may choose to process payday early or late. You’ll want to find out in advance which direction they go, so you’re prepared.

If you have direct deposit set up through your payroll provider, they should be able to tell you when funds will be dispersed (and whether they plan to send it before or after the planned date). Don’t forget that if you’ve set up more than one account for direct deposit with your payroll provider (e.g., checking and savings), those funds will arrive at different times and dates as well.

Find out what happens if payday falls on a bank holiday so you can prepare in advance.


Bank Holidays

If a federal holiday falls on a Saturday, it is observed on the prior Friday. If the holiday falls on a Sunday, it is observed on the following Monday. State and local holidays may be observed differently.

If payday falls on a bank holiday, your paycheck may be affected if you are paid via direct deposit or if you receive a paper check. If you are paid via direct deposit, your payroll provider will likely process pay one day earlier in order to provide funds to the bank before they close for the holiday. If you receive paper checks, your employer will likely issue your check one day earlier in order to provide funds before their office closes for the holiday.

If your company pays you on a certain day of the month (for example, every 25th), then your payday will not be affected by this difference as long as that date does not fall within a weekend or federal bank holiday.


When You Will Be Paid

If you’re paid on a regular schedule, like the last Friday of every month or on the 30th, then it’s likely that you’ll be paid early. If your payday falls on a bank holiday, most companies will either pay everyone early or switch the automatic deposit to another day. If your company pays its employees on the same day each month and that day happens to fall on a bank holiday, you will likely get paid early.

For example: if you get paid normally on April 30th and April 30th falls on a Saturday, you might get paid April 29th. If your normal payday is June 1st and June 1st is a Sunday, you might instead be paid May 31st.


When Your Funds Will Be Available

If your company pays employees using direct deposit, the funds may be available in your account at midnight on the day before the holiday.

Many banks are open on holidays, so this is not an issue. The exception to this rule is bank holidays that fall on a Sunday when banks are typically closed: If you get paid every two weeks and one of those paydays falls on a weekend or bank holiday, you might receive payment three weeks apart rather than the usual two.

It’s important to be aware of any potential issues with your paycheck in order to avoid overdrafting your bank account or being hit with associated fees for late payments (like for a credit card bill). One way to prevent these problems is by setting up direct deposit when you’re getting paid through an employer. Direct deposit is also beneficial because it ensures that your money will be available when expected instead of having to wait until payday to pick up a check from work or having it mailed to you.


How to Find Out

If a bank holiday falls on a Saturday or Sunday, your bank will generally observe it on Friday or Monday. However, not all banks follow this rule.

  • Check your company’s pay schedule. Most companies have a regular schedule that they follow to deposit payrolls. For example, if you are paid weekly, then your payday will follow the same day every week.
  • Consider what type of bank holiday it is. If you’re in the U.S., there are two types of bank holidays: federal and regional/state holidays.
  • Federal holidays apply to all banks throughout the country, but regional or state holidays may not be observed by all banks in your area. Check whether or not any regional or state bank holidays will affect your payday.
  • If a bank holiday falls on a Saturday or Sunday, your bank will generally observe it on Friday or Monday. However, not all banks follow this rule; some may choose to observe a different day as the actual holiday instead of Friday or Monday before or after it occurs on Saturday/Sunday (ex: Wednesday).


Asking Your Bank

If your payday falls on a bank holiday, talk to your local branch to find out when you’ll be paid.

When your payday falls on a bank holiday, you’ll likely have to wait longer than usual for your payment. If you are paid every other week, or biweekly, then this might not be as big of an issue since you will still get paid 26 times per year. However, if you are paid weekly that means there are 52 paydays each year and missing one could create problems with cash flow.

These days, many banks have their own systems in place for paying employees who would otherwise not get paid on a holiday. Some banks might automatically move the pay date forward to the day before or after the bank holiday. But this is not guaranteed and depends on the bank. If your payday falls on a bank holiday, talk to your local branch to find out when you’ll be paid.


Asking Your Employer

As long as you understand your employer’s payroll system and know how to check if your paycheck will be affected by an upcoming holiday, you can avoid any unpleasant surprises.

  • To avoid a missed payday, talk to your employer and bank. It’s important to understand the way your company pays you, and if that might be affected by an upcoming holiday. Your employer can provide information on their payroll schedule and let you know if they use direct deposit or paper checks. If they do use direct deposit, your bank will have information on when the funds are transferred into your account. Banks also have online banking or mobile apps that allow you to check the availability of funds from recent deposits.
  • Check company policy for bank holidays. Your company’s policy for handling paydays around holidays will likely be outlined in one of several places: their payroll calendar, employee handbook or company website. You may also look to the Fair Labor Standards Act (FLSA) for some companies as it has rules about how often employees must receive payment. If no such information is readily available, you should ask someone in Human Resources or Payroll for clarification.

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