Seasonal employment definition and meaning
Seasonal employment refers to temporary work that helps employers meet staffing needs during holidays, high seasons, or other peak business periods.
What you’ll learn
What you’ll learn
Updated: May 7, 2025
More about seasonal employment
Simply put, seasonal employment can make a lot of sense for businesses that are only open for part of the year or may require extra hands at different times of the year. Individuals who fill these roles are typically temporary workers who are only occasionally on the payroll, rather than traditional, full-time employees, who employers expect to be available year-round.
For example, a retailer may bring on a sizable number of seasonal employees in December, when consumer demand might be at its peak because of the holidays. Some of the most common examples of seasonal positions, aside from the retail scenario we just highlighted, include delivery drivers, tour guides, tax professionals, event staff, hospitality workers, servers and bartenders, and even customer service representatives.
What does the IRS consider to be seasonal employment?
According to the IRS, a seasonal employee is someone who performs labor or services for a duration of 12 months or less. For example, if you hire a worker in December to help you with the holiday rush, but they end up staying for the next 12 months, they’re no longer considered a seasonal employee. Regardless of whether your employees are seasonal or full-time, they must complete a W-4 tax form so you can report their income to Uncle Sam. This form will also help you to know how money you should withhold from their paychecks to cover federal and state taxes.
Do seasonal workers pay taxes?
The IRS views seasonal workers the same as full-time employees or any other type of employees. Therefore, seasonal workers are subject to tax payments. When you pay a seasonal employee, you must withhold federal income tax, Social Security and Medicare taxes (FICA), and state and local income taxes. In addition, you’ll need to report their wages, including tips and other forms of compensation on Form W-4, just like you would for a full-time employee.
How do seasonal workers get paid?
It’s up to you as the employer to establish a pay process for seasonal employees. Depending on your state, you might have to pay a minimum wage that exceeds the federal minimum wage. The minimum wage might also vary based on a seasonal employee’s line of work. Also, you’ll need to determine an overtime pay rate for when a seasonal employee who is nonexempt from the Fair Labor Standards Act (FLSA) works more than 40 hours per week.
While this rate will likely be one and a half times your seasonal worker’s regular rate, it will depend on your state’s regulations. When it comes to pay frequency, weekly or bi-weekly pay periods are often ideal for seasonal employees. While these pay periods may increase your administrative burden, they can provide your seasonal workforce with a more consistent income stream, ideally increasing morale and retention. Depending on your business, cash flow, and priorities, may also want to give seasonal employees the opportunity to access their wages in between paychecks.
Industries where seasonal employment is common
Seasonal employees are widely used (and generally realize the work is going to be temporary) in a number of industries, including:
- Retail: Due to the increased demand for shopping, the retail industry tends to hire seasonal employees in the fall and winter seasons. These employees may work as cashiers, gift wrappers, or shelf-stockers.
- Construction: A lot of builders depend on seasonal employees to support them in the spring and fall, especially if they’re in areas with very hot or wet summers.
- Agriculture: Farms running ag payroll are usually busiest in the fall and often hire farmers, landscape laborers, or other seasonal workers during their peak months of September and October.
- Tourism: Some vacation destinations are popular in the summer or winter and depend on seasonal employees to meet their guests’ needs during those times.
What’s the difference between seasonal and part-time?
A part-time employee works fewer than 30 or 40 hours per week. Part-time employees are common in hospitality, retail, and sales as they help businesses in these industries with their operations when there are not enough duties for them to work full time hours. A seasonal employee, on the other hand, is a part-time employee that only works during periods where a business requires additional support. Seasonal employees may work for a few months or even a few weeks. While seasonal employees only work during a specific time of the year, part-time employees may work year-round. Both seasonal and part-time employees may eventually transition into full-time roles.
Potential pros of seasonal employment for employers
The most noteworthy benefits of seasonal employment include:
- Lower payroll costs: By hiring as-needed seasonal employees, you can reduce payroll expenses. You’ll only have to pay your workers when they actually do their jobs.
- Chance to “try out” an employee: If your business is open year-round, you can “test out” seasonal employees. You may always bring them on full-time if you like their work. On the flip side, if they don’t meet your expectations you may let them go after a few months.
- Faster hiring process: Compared to full-time employees, seasonal employees are usually faster to hire. You may have a less rigorous vetting process for them, as well as shorter contracts.
Potential drawbacks of seasonal employment for employers
Before you move forward with seasonal employees, consider these disadvantages:
- Less motivated workers: If employees know they’ll only be around for a short period of time, they may not take their positions as seriously as full-time employees. To prevent this, state your expectations upfront and foster a positive culture as well as an enjoyable work environment.
- Minimal training: Oftentimes, seasonal employees receive reduced job training compared to full-time employees (hours or days compared to weeks or months). This can cause workers to become stressed or unprepared for their workload. Be sure to implement a thorough training program for seasonal employees so that they feel confident about their performance.
- Loyalty may lack: It’s not uncommon for seasonal employees to suddenly switch jobs or provide little notice because they found a position with higher pay or more flexibility. To reduce the risk of seasonal employees leaving before you’d like them to, pay them fairly and make sure they know that they’re valued.
- Can be difficult to find: Depending on your industry and the types of seasonal employees you need, it may be a challenge to find these workers. Some people may prefer more stable, full-time employment.
Do seasonal employees get benefits?
In most cases, seasonal employees do not receive traditional benefits that may be available to full-time employees, such as health insurance and 401(k) retirement plans. However, you may decide to offer fringe benefits to attract the top seasonal candidates and motivate them to perform well. Here are several examples of fringe benefits you might consider for your seasonal workers:
- Flexible schedules: Flexible work hours are particularly important for seasonal workers who likely have other responsibilities outside of work at your company
- Wellness stipends: A wellness stipend can provide your seasonal workers with funds for gym memberships, fitness classes, meal planning, and mental health services
- Commuter perks: Depending on your location and the line of work performed by seasonal employees, reimbursements for parking and public transit as well as gas stipends may be beneficial
- Performance incentives: You may get creative and offer commissions and other incentives beyond traditional cash bonuses to seasonal workers who go above and beyond
- Training and development: Paying for your seasonal employees to attend conferences and training courses can indicate that you value their growth even though they only work for you on a seasonal basis
Can seasonal employees collect unemployment?
A seasonal employee may be eligible for unemployment benefits. It all depends on the state laws, how long they were employed, their earnings, and the circumstances that led to the termination or reduction in work hours. Note that some states do allow seasonal employees that get laid off to collect unemployment for the rest of the off-season while others do not. It’s important to become familiar with the unemployment laws in your particular state.
Using seasonal employment in a sentence
“It was exciting to see how our holiday promotion paid off again this year. Now that it seems to be part of a larger trend for our shop, next time around I’ll be on the lookout for those interested in seasonal employment earlier in the year.”
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