When choosing a pay period for your business, there are many variables to take into account. Selecting the best option for your employees can be crucial to company morale, turnover, and overall employee satisfaction – making the decision an important one. Take a look at the need-to-knows of payroll periods to see what structure works best for you and your employees.
Nearly every state in the United States has a payday requirement, or the minimum frequency for paying employees. While some states require weekly or monthly payment, others may mandate payment on a semimonthly or biweekly basis. Pay periods can also be determined based on occupation. Be sure to check your state’s law before selecting a pay period to ensure compliance.
Each state’s payday law can be found here!
A weekly payroll equates to employees being paid every week, as its name suggests. This means employees will receive 52 paychecks within a calendar year, typically distributed on the same day of the week. Though not as common, this payroll structure has its perks. Here is an overview of the average pros and cons to a weekly pay period for employees.
Biweekly payroll is the most frequently used pay period for employers, and is considered the most convenient. Employees receive their paychecks 26 times a year, typically equating to twice a month. Each paycheck consists of 80 hours. These paydays occur on the same day of the week, every other week. For example, an employer may choose every other Thursday as their employee’s paydays.
Comparable to the biweekly format, a semimonthly pay period means employees are paid twice a month on specific days. For example, an employer may choose to pay their employees on the 5th and 20th of each month, as opposed to every other Friday (biweekly). There are 86.67 hours per pay period with this structure. Take a look at the pros and cons of this commonly compared pay period.
Running only 12 times out of the year, the monthly pay period is one of the least common pay structures. There are 173.33 hours per pay period, with payday typically being the end of the month. Here are the advantages and concerns to take into account prior to implementing this pay period.