{"id":4246,"date":"2025-12-03T13:26:17","date_gmt":"2025-12-03T18:26:17","guid":{"rendered":"https:\/\/primepay.com\/blog\/how-federal-holidays-affect-payroll\/"},"modified":"2026-02-17T16:41:10","modified_gmt":"2026-02-17T21:41:10","slug":"how-federal-holidays-affect-payroll","status":"publish","type":"post","link":"https:\/\/primepay.com\/blog\/how-federal-holidays-affect-payroll\/","title":{"rendered":"Federal Holidays in 2026: A Guide to Paying Your People"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">You\u2019re probably familiar with the final scene in <\/span><i><span style=\"font-weight: 400;\">National Lampoon\u2019s Christmas Vacation<\/span><\/i><span style=\"font-weight: 400;\"> when Clark, expecting a large Christmas bonus, instead receives a one-year membership to the Jelly-of-the-Month Club instead.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">While this swing-and-a-miss by his boss is (hopefully) an exaggeration of pay around the holidays, it <\/span><i><span style=\"font-weight: 400;\">does<\/span><\/i><span style=\"font-weight: 400;\"> showcase how people depend on their paychecks and bonuses. This sentiment is even more true in winter when <\/span><a href=\"https:\/\/www.forbes.com\/advisor\/credit-cards\/holiday-spending-trends-2023\/#:~:text=Over%20a%20third%20of%20respondents,debt%20to%20help%20cover%20costs.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">spending increases significantly<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">It\u2019s therefore critical for companies to understand, plan for, and deliver holiday pay on time. So, how do holidays like Thanksgiving and Veterans Day affect direct deposits? <\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"jump-link-one\"><span style=\"font-weight: 400;\">What Federal Holidays Affect Direct Deposits in 2026?&nbsp;<\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>New Year\u2019s Day &#8211; January 01, 2026<\/li>\n\n\n\n<li>Martin Luther King, Jr. Day &#8211; January 19, 2026*<\/li>\n\n\n\n<li>Washington\u2019s Birthday &#8211; February 16, 2026<\/li>\n\n\n\n<li>Memorial Day &#8211; May 25, 2026<\/li>\n\n\n\n<li>Juneteenth Independence Day &#8211; June 19, 2026<\/li>\n\n\n\n<li>Independence Day &#8211; July 04, 2026<\/li>\n\n\n\n<li>Labor Day &#8211; September 07, 2026<\/li>\n\n\n\n<li>Columbus Day &#8211; October 12, 2026<\/li>\n\n\n\n<li>Veterans Day &#8211; November 11, 2026<\/li>\n\n\n\n<li>Thanksgiving Day &#8211; November 26, 2026<\/li>\n\n\n\n<li>Christmas Day &#8211; December 25, 2026<\/li>\n<\/ul>\n\n\n\n<p>*Both the Federal Reserve Banks and the Board of Governors are closed in observance.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1920\" height=\"898\" src=\"https:\/\/primepay.com\/wp-content\/uploads\/2026-Payroll-and-Tax-Calendar-Screenshot-1920x898.png\" alt=\"2026 Payroll and Tax Calendar Screenshot\" class=\"wp-image-11714\" title=\"\" srcset=\"https:\/\/primepay.com\/wp-content\/uploads\/2026-Payroll-and-Tax-Calendar-Screenshot-1920x898.png 1920w, https:\/\/primepay.com\/wp-content\/uploads\/2026-Payroll-and-Tax-Calendar-Screenshot-768x359.png 768w, https:\/\/primepay.com\/wp-content\/uploads\/2026-Payroll-and-Tax-Calendar-Screenshot-1536x718.png 1536w, https:\/\/primepay.com\/wp-content\/uploads\/2026-Payroll-and-Tax-Calendar-Screenshot-2048x958.png 2048w\" sizes=\"auto, (max-width: 1920px) 100vw, 1920px\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Plan for the year and download our <a href=\"https:\/\/primepay.com\/wp-content\/uploads\/2511_PrimePay_2026Calendar_v03_NDS.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">2026 Payroll and Tax Calendar<\/a>.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"jump-link-two\"><span style=\"font-weight: 400;\">Why Federal Holidays Matter For Your Payroll<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">The Federal Reserve and Automated Clearing House (the electronic network for financial transactions including business-to-business payments, direct deposit of payroll, consumer bills, Social Security, e-commerce payments, and tax payments) are closed on federal holidays.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">When the Federal Reserve is closed on holidays, money doesn\u2019t get transferred, AKA direct deposits won\u2019t go through on those days. And while most banks follow suit and close their doors, some remain open but offer minimal services.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Thus, since your employees won\u2019t receive their direct deposits on holidays, you\u2019ll need to review the next scheduled check date for accuracy and alter the run date to accommodate.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">What is Holiday Pay?<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Holiday pay is when employees receive compensation, whether or not they worked on a federal holiday.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Many organizations provide time off and holiday pay for more than 11 federal holidays, such as Easter, Lincoln\u2019s birthday, and election days.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">It\u2019s important to note that holiday pay is part of an organization\u2019s pay policy (such as paying overtime, time-and-a-half, and bonuses) and isn\u2019t tied to the Federal Reserve or Automated Clearing House\u2019s procedures.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Do I Have to Pay My Employees on Federal Holidays?<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">You must pay your salaried employees their full weekly salary if they work during the federal holiday week. On the other hand, hourly employees do not require pay, as they\u2019re only paid for actual hours worked.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Are Federal Employees Paid on Federal Holidays?<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Yes, the government will pay employees on federal holidays and every four years on Inauguration Day. Most federal employees are entitled to premium compensation when they\u2019re required to work during designated holiday hours. Soldiers are paid by salary and receive equal pay regardless of their work hours.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">What if a Federal Holiday Falls on a Weekend?<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">When the national holiday falls on Saturday, the holidays are celebrated on Fridays. However, if the day falls on Sunday, the holiday will be on Mondays. <\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">The Difference Between Federal and Religious Holidays<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">You may have noticed that among the 11 federal holidays, only one is a religious day. In fact, Christmas Day is the only religious day officially recognized in the United States.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">To create an equitable and inclusive workplace environment, it\u2019s best practice to have several floating holidays that employees can use throughout the year. Doing so not only enhances work-life balance and attracts top talent, but also respectfully acknowledges people of different cultures and backgrounds.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Can Federal Employees Receive Paid Leave for Religious Holidays?<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Federal employees may change their working schedule to accommodate religious observance that requires abstaining from work at all times during the working week. If employees choose to work on weekends or overtime to make up for the work missed, they\u2019re not entitled to bonuses or additional compensation.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Examples include Jewish employees taking off for Rosh Hashanah and Yom Kippur or Muslim employees using a floating holiday for Eid Ul-Fir.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"jump-link-four\"><span style=\"font-weight: 400;\">3 Tips for Managing Payroll Around Federal Holidays in 2026 <\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Whether you\u2019re currently developing your compensation strategy or already have a plan, it\u2019s wise to consider how you\u2019ll pay your people around federal holidays in 2026. Below are three tips to ensure you choose a strategy that best suits your organization&#8217;s needs.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">1. Conduct Background Research<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Before you say <\/span><i><span style=\"font-weight: 400;\">this is how we\u2019ve always done it<\/span><\/i><span style=\"font-weight: 400;\">, it\u2019s essential to consider if there\u2019s room for improvement in your payroll practices around the holidays.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Make sure you consider your:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><b>Company finances.<\/b><span style=\"font-weight: 400;\"> You might work at a Fortune 500 company with enough runway to financially support granting your people additional paid days off. Alternatively, you could lead a startup that can\u2019t afford to pay employees holiday pay. Make sure your pay practices around federal holidays match your budget so you can confidently pay your people when it makes sense.<\/span><\/li>\n\n\n\n<li><b>Workplace culture<\/b><span style=\"font-weight: 400;\">. Does your compensation and benefits plan match your workplace culture? If not, it\u2019s time to start moving in that direction. Specifically, <\/span><a href=\"https:\/\/www.linkedin.com\/pulse\/how-create-pto-policy-prioritizes-employee-happiness\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Xpedition\u2019s team<\/span><\/a><span style=\"font-weight: 400;\"> realized their policies needed to align better with their company culture and values. They were intentional about restructuring \u2013 they even asked employees their thoughts \u2013 before rolling out a new PTO plan.<\/span><\/li>\n\n\n\n<li><b>Competitors\u2019 holiday pay.<\/b><span style=\"font-weight: 400;\"> Consider your recruitment strategies and how you\u2019ll <a href=\"https:\/\/primepay.com\/blog\/when-is-hiring-season\/\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/primepay.com\/blog\/when-is-hiring-season\/\" rel=\"noreferrer noopener\">attract top talent<\/a> away from your competitors. If your competitors offer the same base pay but an additional three floating holidays, that distinction will come up when candidates choose their future employer.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">2. Communicate, Communicate, Communicate<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">It shouldn\u2019t come as a surprise when payday is, especially around federal holidays. After developing your strategy, communicate your decision in various ways, including via All Hands meetings, department heads and managers, and HR announcements.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">For example, <\/span><a href=\"https:\/\/www.benefitsatfanatics.com\/-\/media\/Mercer\/Fanatics\/Documents\/Paid_Holiday_Policy.pdf?rev=daf527fffad84dcc91253a210fd6c540\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Fanatics<\/span><\/a><span style=\"font-weight: 400;\"> publishes their paid holiday policy publicly so current and future employees are always in the know about specific procedures.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Another part of your communication strategy should be outlining the expectations of your payroll team. For example, if your Director of Payroll usually takes additional days around Thanksgiving, ensure she knows she must submit payroll early so everyone receives their paycheck on time.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">3. Hand the Payroll Burden to the Experts<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Payroll errors are more common than you think. And we get it \u2013 a lot of manual entry is involved when <\/span><span style=\"font-weight: 400;\">processing payroll information<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">In fact, the <\/span><a href=\"https:\/\/www.bls.gov\/news.release\/pdf\/empsit.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">U.S. Bureau of Labor Statistics<\/span><\/a><span style=\"font-weight: 400;\"> reports that 54% of salaried Americans have received inaccurate paychecks, while 46% of hourly employees have experienced incorrect, late, or \u2013 wait for it \u2013 money deposited into the wrong account.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">To combat these manual errors and regain time, partner with a payroll provider to ensure the right people are getting paid at the right time.<\/span><\/p>\n\n\n<div id=\"brxe-ojflqm\" class=\"brxe-block cta-block__gradient cta-block radius--xl\"><div id=\"brxe-ykuqds\" class=\"brxe-container cta-block__content-wrap\"><figure id=\"brxe-lkvktb\" class=\"brxe-image cta-block__logo tag\"><img loading=\"lazy\" decoding=\"async\" width=\"972\" height=\"256\" src=\"https:\/\/primepay.com\/wp-content\/uploads\/NEW-primepay-logo-white-lg-tagline.png\" class=\"css-filter size-full\" alt=\"\" srcset=\"https:\/\/primepay.com\/wp-content\/uploads\/NEW-primepay-logo-white-lg-tagline.png 972w, https:\/\/primepay.com\/wp-content\/uploads\/NEW-primepay-logo-white-lg-tagline-768x202.png 768w\" sizes=\"auto, (max-width: 972px) 100vw, 972px\" title=\"\"><\/figure><p id=\"brxe-lubcda\" class=\"brxe-heading cta-block__heading\">Run Payroll with PrimePay<\/p><a id=\"brxe-zwhfyd\" class=\"brxe-button btn--action cta-block__button bricks-button bricks-background-primary\" href=\"https:\/\/primepay.com\/pricing\/\">Explore Pricing<\/a><\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">PrimePay at Your Service<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">As a leading payroll service provider, PrimePay can partner with you to offer support throughout the entire employee lifecycle. Learn more about how PrimePay can help you streamline HR processes, support tax obligations, and manage your payroll calendar as easy as 1-2-3. <\/span><\/p>\n\n\n\n<p><span class=\"add-arrow\"><a href=\"https:\/\/primepay.com\/demo-request\/\" target=\"_blank\" rel=\"noopener\">Schedule a call today<\/a><\/span><\/p>\n\n\n\n<p><strong><em>Please read our disclaimer&nbsp;<a href=\"https:\/\/primepay.com\/disclaimer\/\" target=\"_blank\" rel=\"noopener\">here.<\/a><\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You\u2019re probably familiar with the final scene in National Lampoon\u2019s Christmas Vacation when Clark, expecting a large Christmas bonus, instead receives a one-year membership to the Jelly-of-the-Month Club instead. While this swing-and-a-miss by his boss is (hopefully) an exaggeration of pay around the holidays, it does showcase how people depend on their paychecks and bonuses. [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":4249,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[15],"tags":[],"class_list":["post-4246","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-payroll-tax"],"acf":[],"_links":{"self":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts\/4246","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/comments?post=4246"}],"version-history":[{"count":3,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts\/4246\/revisions"}],"predecessor-version":[{"id":12468,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts\/4246\/revisions\/12468"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/media\/4249"}],"wp:attachment":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/media?parent=4246"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/categories?post=4246"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/tags?post=4246"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}