Some employers issue paychecks once a week, some issue paychecks just once a month. So which is right for your company, and your employees?
From our experience, for the average business owner, bi-weekly pay periods are the most often chosen. Paying employees on a biweekly basis means a more cost-effective payroll processing for the employer, and most employees are used to receiving paychecks every other week.
When you pay your employees on a biweekly basis, it is important to remember that because there are 26 paychecks in a year, there are a couple of months where employees will be paid three times.
In a post on Entrepreneur.com the author Josh Reeves says:
“So who prefers biweekly pay periods? Salaried employees are exempt from collecting overtime but hourly employees are not. That’s one reason hourly employees prefer biweekly pay periods. Hourly employees may have inconsistent weekly work schedules, which can include overtime. For example, your employee may work 60 hours one week.
For a biweekly pay schedule, this overtime is easy to calculate. It is more complicated for companies on a semi-monthly plan because they typically pay their hourly employees at 86.67 hours per period (which is a little over two 40-hour weeks). If those extra hours are between two different semi-monthly pay periods, you will have to make adjustments and it can be confusing.
The advantages to weekly payroll. Weekly payroll is not a popular option for most companies outside the trades (e.g, construction, plumbing, etc.) industry. One of the most prohibitive reasons is cost. Most payroll vendors charge each time payroll is run. If you have dozens of employees on weekly schedules, those fees can add up. Another stumbling block is that each time you run payroll, it can take up a lot of time for you or your payroll administrator, especially if there are payroll accruals and overtime. ”
Whatever your preference for pay periods at your company, we can accomadate you. Complete Employee Solutions is happy to offer our input, but the bottom line is what is best for you, your company and your employees!