How does he pay his elves? He doesn’t, the North Pole is a feudal system and Santa is its King. The elves pay him for protection (against other elves?) and as long as elf society runs smoothly, they have no reason to revolt. And Santa, aware of the pathological greed that men in his position tend to develop, gives away all overproduction to the children of the world every year, as a reminder to himself and his elves that maintaining a stable society is more important than amassing wealth.