October is when a lot of Wigan shops, pubs, restaurants and warehouses start lining up extra pairs of hands for the Christmas rush. Taking on temporary staff is usually the easy bit. Getting them onto the payroll properly, and off it again in January without a tangle, is where small businesses tend to come unstuck.

Here is a plain-English checklist for payroll for small businesses taking on seasonal workers this year, so you stay on the right side of HMRC and your new starters get paid correctly from day one.

Temps are employees, not a special case

The most common mistake we see is treating Christmas staff as “casual” and paying them cash or outside the payroll. If someone works under your direction, on your rota, using your till or your van, they are almost certainly an employee for tax purposes, even if they are only with you for six weeks. Calling them freelance does not change that.

That means they need to go through PAYE like anyone else: tax and National Insurance worked out each payday and reported to HMRC in real time.

Before their first shift: right to work checks

You must check that every new starter has the right to work in the UK before they start, and keep a record of the check. This applies to a student working three Saturdays just as much as to a full-time manager. The penalty for employing someone without the right to work can be up to £60,000 per worker, so it is not a step to skip when you are busy.

Getting them on the payroll

Ask each new starter for their P45 from their last job. Most seasonal workers will not have one, so ask them to complete HMRC’s starter checklist instead. Their answer decides their tax code:

• Statement A (this is their first job since 6 April, with no benefits or pension): they normally get the standard tax code on a cumulative basis.
• Statement B (this is their only job now, but they have worked earlier in the tax year): the standard code on a “week 1 / month 1” basis.
• Statement C (they have another job or a pension): code BR, which taxes all their pay from you at the basic rate.

That last one matters. Lots of Christmas temps already have a day job, and getting the code wrong means either a surprise tax bill for them later or an awkward conversation now.

You then report them to HMRC on a Full Payment Submission on or before their first payday, along with everyone else. If you run payroll monthly but want to pay temps weekly, you can set up a second pay frequency rather than bending them into the monthly run.

Minimum wage and holiday pay

Temporary workers are entitled to at least the National Minimum Wage or National Living Wage for their age, for every hour they work, including any compulsory training or time spent setting up and closing down. From April 2026 the National Living Wage for workers aged 21 and over is £12.71 an hour.

They also build up paid holiday from their first day. For staff on irregular hours or who only work part of the year, the rules now let you pay “rolled-up” holiday pay: an extra 12.07% on top of each payslip, shown separately, instead of tracking hours and booking leave. For short Christmas contracts this is often the simplest option. Whatever you choose, holiday they have built up but not taken must be paid when they leave.

Workplace pensions still apply

Auto-enrolment does not switch off for short contracts. You need to assess every worker each pay period. Anyone aged 22 to State Pension age earning over £10,000 a year (£833 a month or £192 a week) must be put into your pension scheme.

For temps you can use “postponement” to delay assessing them for up to three months, which often means a Christmas worker leaves before they would need to be enrolled. You must write to them to tell them about the postponement, and they can still choose to join. Keep a copy of the letter in case The Pensions Regulator asks.

National Insurance and sick pay

Employers pay National Insurance at 15% on earnings above £5,000 a year (about £96 a week). Many part-time temps will earn below that, so there may be no employer NI to pay at all. If you do go over, remember that most small businesses can claim the Employment Allowance, which knocks up to £10,500 a year off the employer NI bill.

Sick pay rules also changed in April 2026, so staff who would not have qualified for Statutory Sick Pay in the past, because they earned too little, may now be entitled to it. Check before you tell a temp who calls in sick that they get nothing.

When they leave in January

When a seasonal worker finishes, put their leaving date on your next Full Payment Submission and give them a P45. Pay any holiday owed in their final pay. Leaving someone “on the books” because they might come back next year causes problems with their tax code and with HMRC’s records, so finish them properly and re-hire them as a new starter if they return.

If you give your team a Christmas do or small gifts, our guide to trivial benefits and staff parties explains how to keep those tax-free.

A quick seasonal payroll checklist

• Right to work check done and recorded before day one
• P45 or starter checklist collected, and the right tax code set
• Added to your Full Payment Submission on or before first payday
• Hourly rate checked against the minimum wage for their age
• Holiday pay method chosen (accrued or rolled-up at 12.07%)
• Pension assessment done, or a postponement letter sent
• Leaving date reported, P45 issued and holiday paid when they finish

Need a hand with Christmas payroll?

If the thought of adding a dozen temps to your payroll in November fills you with dread, we can take it off your plate. Our payroll service in Wigan covers new starters, RTI submissions, pensions and leavers, and our outsourced payroll option means you never have to touch it at all. We work with plenty of retail and leisure and hospitality businesses across the North West who go through this every year. For a wider look at running staff pay, see our guide to payroll and pension management for SMEs.

Talk to your local accountant in Wigan: call CMA Accountancy on 01257 255521, email [email protected], or get in touch online. We are based in Appley Bridge, Wigan, and happy to help before the rush starts.