How Federal Holidays Affect Payroll Processing #

Federal holidays can affect when payroll is processed, debited, and deposited. They are treated as non-business days for payroll processing.

On federal holidays, banks are closed. Because of this, Friday cannot:

• Debit payroll funds from your company bank account
• Deposit payroll funds into your employees’ bank accounts
• Process payroll through the banking system

Federal holidays do not count toward payroll processing lead time.

Which Federal Holidays Does Friday Recognize? #

Friday recognizes these 11 U.S. federal holidays:

• New Year’s Day (January 1)
• Martin Luther King Jr. Day (third Monday in January)
• Presidents’ Day (third Monday in February)
• Memorial Day (last Monday in May)
• Juneteenth (June 19)
• Independence Day (July 4)
• Labor Day (first Monday in September)
• Columbus Day (second Monday in October)
• Veterans Day (November 11)
• Thanksgiving Day (fourth Thursday in November)
• Christmas Day (December 25)

Weekend and Observed Dates #

If a federal holiday falls on a Saturday, it is observed on the preceding Friday. If it falls on a Sunday, it is observed on the following Monday. Friday uses these observed dates when calculating business days, pay dates, and processing deadlines.

Example: If July 4 falls on a Saturday, the observed holiday is Friday, July 3. That Friday is treated as a non-business day.

Processing Lead Times and Cutoff Times #

How far in advance you must run payroll depends on your company’s processing period. Processing time is counted in business days. Weekends and federal holidays do not count.

• 1-day processing: Submit 1 business day before pay date by 8:00 PM ET
• 2-day processing: Submit 2 business days before pay date by 8:00 PM ET
• 3-day processing: Submit 3 business days before pay date by 3:00 PM ET

When running payroll manually, the earliest selectable pay date is today plus your processing lead time in business days. If your company pays entirely by printable check, same-day pay dates may be available.

Payroll must be submitted by the cutoff time on your processing deadline day. Reminder notifications are sent 15 minutes before the cutoff.

How Friday Adjusts Pay Dates #

Friday handles holidays differently depending on whether the pay date comes from a pay schedule or is chosen manually when running payroll.

Scheduled Pay Dates #

For weekly, biweekly, semimonthly, and monthly pay schedules, if the configured check date falls on a weekend or federal holiday, Friday moves the pay date earlier to the previous business day.

For quarterly pay schedules, the pay date is the first business day after the quarter ends. If that day is a weekend or holiday, Friday moves the pay date later to the next business day.

Manual Pay Dates #

When you choose a pay date while running payroll, you cannot select a weekend or federal holiday. The date picker only allows valid business days on or after your earliest possible pay date.

Late or Missed Payroll #

If payroll is not submitted by the processing deadline, employees may receive pay later than expected. If the processing deadline for your chosen pay date has passed, Friday moves the pay date forward to the next available business day.

• Autopay: If the approval deadline has passed, Friday updates the pay date automatically.
• Wire payroll: If submitted after 3:00 PM ET or on a non-business day, the wire pay date moves to the next business day.

Example: Holiday During 2-Day Processing #

Your company uses 2-day processing and wants employees paid on Tuesday.

• Submit payroll by 8:00 PM ET on the prior Friday (2 business days before Tuesday).
• If Monday is a federal holiday, Monday does not count as a processing day.
• Submit payroll by 8:00 PM ET on the preceding Thursday instead.

Example: Scheduled Pay Date on a Holiday #

Your monthly pay schedule has a check date of November 11 (Veterans Day).

Friday moves the pay date earlier to the previous business day (for example, Monday, November 10).

Example: Quarterly Pay Schedule #

Your quarterly pay schedule ends on June 30.

The check date is the first business day after the quarter ends. If that day is a weekend or holiday, Friday moves the pay date forward to the next business day.

Important #

• Check for upcoming federal holidays before running payroll, especially around long weekends and observed dates.
• Plan to submit payroll earlier when a holiday falls within your processing window.
• If a pay date falls the business day after a holiday and you are on 2-day processing, consider faster processing so employees are paid on time.