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A pay period is a time frame during which you are paid. The pay period ends when your employer pays out for the next month. This can be done by giving employees their paycheck or depositing money directly into their bank accounts.
A pay period is a period over which workers work and are paid. There are numerous pay periods to pick from, such as weekly or twice a month, and payroll calendars make it simple to keep track of them.
Pay Periods and How They Work
Employers establish a regular pay period to guarantee that their workers get consistent salaries. While most businesses build their pay schedules on the company’s demands, labor regulations control the minimal consistency with which these plans must conform. It’s crucial to know how frequently your state requires firms to handle payroll before deciding on a pay schedule:
To establish a regular pay schedule, employers examine the minor frequency they may legally execute payroll—usually monthly. Remember that every pay schedule contains start and finish dates for time worked and a payday when workers are paid. The employer determines the payday; some set the payday as the final day of each pay period, while others pay a week after the pay period finishes.
Your payday alternatives may be restricted if you use a professional employer organization (PEO); for instance, some more extensive payroll services only allow you to pay employees on Fridays.
Weekly Calendar for the Year 2021
Weekly Calendar for 2022
Biweekly Calendar for 2021
Biweekly Calendar 2022
Semimonthly Calendar for 2021
Semimonthly Calendar 2022
Monthly Calendar for the Year 2021
Monthly Calendar for the Year 2022
Types of Pay Periods & How to Choose
A year may be split into 52 weeks, 365 days, or 12 months, giving you a variety of payroll plans to choose from. Some companies prefer to pay once a week or every other week because they are more concerned with weekly payouts. Others split each month in half and pay halfway through and at the end. A monthly payment schedule is also preferable for some businesses, even though it is less frequent. When deciding on your pay schedule, keep the following aspects in mind:
- Average pay: Tipped minimum wage restaurant staff may be better suited to weekly payouts. Forcing low-wage workers to wait two to three weeks for salary might have a negative impact on morale.
- Company cash flow: Paying weekly necessitates having enough cash on hand to pay more often. Some firms, such as retailers that sell products on credit, have longer cash flow cycles that need more time before bank accounts are refilled.
- Profitability: Processing payroll on a more frequent basis costs more money ($50 to $100 every pay run for ten workers); therefore, specific organizations, particularly startups, must budget more carefully. Employers that use Gusto may perform unlimited monthly payrolls at no additional expense.
Pay Period: Weekly
Employees are paid once a week, and their cheques reflect the number of hours worked (or wage) for a workweek—for example, Sunday through Saturday. Because Friday is the final working day of the week, many firms chose Friday as their payday; however, it may be any day of the week. This cycle affects many constructions, manufacturing, restaurants, and mining firms.
BiPay Period: Weekly
Biweekly payroll indicates that workers are paid for two workweeks every two weeks or every other week. This amounts to two paydays for most months. However, three months each year (vary from year to year) have three biweekly paydays.
To keep in mind, biweekly pay is the most frequent pay schedule in the United States, with 36.5 percent of private companies paying their workers every two weeks. Many companies follow it in the education, healthcare, leisure & hospitality, and information technology sectors.
Pay Period: Semimonthly
Not to be confused with biweekly, semimonthly refers to two times a month. Many businesses choose to make payments on the 15th and final days each month. If one of those days occurs on the weekend, payroll will be completed on the next available weekday. Depending on the number of days in the month, the pay period might range from 14 to 16 days. Businesses in the financial, information technology, professional, and business service sectors are the most likely to pay semimonthly—it’s the second least standard pay schedule.
Pay Period: Monthly
Payroll is handled once a month on a monthly payment schedule. It is less frequent than the others, with 12 pay periods each year. Employees are paid on the last Friday of each month by certain firms, while others pay on the final day of the month by others. They may bear on the final workday before the weekend if it falls on a weekend. Monthly pay is the least common of the pay schedules; however, companies that provide professional or commercial services are sometimes employed.
Arrears vs. Current Payment
Let’s look at an example of how a company creates a payment schedule to see how the difference between paying in arrears and paying current differs:
Dorothy is starting a restaurant and has decided to pay her staff weekly. She’ll have to select when the workweek begins and ends, as well as when workers will be paid. Her salary schedule is as follows.
The dates in yellow define the pay period. Payday is one day before the conclusion of the pay month; this is a current payment schedule.
When you pay current, you pay employees as soon as or before their pay cycle ends. In the example above, Dorothy is “paying current.” To reiterate, Dorothy chose Sunday through Saturday as her Pay Period: Weekly with Friday as the payday. This means she’ll have to estimate the work hours for Saturday because employees will be paid for Saturday before it arrives.
Paying workers in arrears implies a lag between when they work and when they get paid for it. Depending on state rules, this wait might last a week or more. Remember that Iowa’s maximum delay is 12 days by default.
Paying workers in arrears may be done in a variety of ways. Here’s one example:
Jeff’s pay period is Sunday through Saturday, but he chooses to pay on the following week’s Friday (six days after the last workday). While this might be inconvenient for new workers who may have to spend a week “in the hole,” which means they aren’t paid until the conclusion of their first week, it can be advantageous for certain companies.
If you pay your workers for the time that hasn’t yet gone, it’s possible that their schedule could alter unexpectedly, requiring adjustments on the following pay period. You’ll have to keep track of pay cycles for which you’ve already processed payroll, and you’ll have to comply with federal overtime requirements, which require you to pay time and a half (1.5 times standard hourly pay) for hours worked above 40 in a workweek.
Choosing Between Paying in Arrears and Paying Current
There is no hard and fast rule on whether you should pay current or in arrears. It would help if you thought about your company’s and workers’ requirements. Paying in arrears allows you to acquire all timesheets, trip reports, and other necessary information to ensure proper payroll processing; you won’t have to predict staff schedules.
For some workers, paying current is less complicated and works effectively in particular situations. Assume a corporation has a pay cycle from Sunday to Saturday, with Friday being payday. There would be less guessing if the staff just worked Monday through Friday. The workers do not work on Saturdays, even though it is part of the pay cycle. It also applies to salaried workers who are paid the same amount every pay period, regardless of the number of hours they work.
Using Pay Period Calendars & Charts
You may prevent missing a payday by using a pay period calendar and chart. If you haven’t already, print the matching calendar and chart now that you know how to determine your pay period. If they become confused, employees may want a copy to refer to, and bookkeepers may find them handy when recording and forecasting payroll expenditures (especially if payroll is paid in arrears).
Using the Pay Period Chart, keep track of employee hours.
After printing it, you may use your payroll chart to calculate your workers’ work hours for the pay period. The graph shows the start and end dates for each paycheck, so you can quickly make sure you’re only paying for hours spent within the correct period. Requiring your hourly staff to submit timesheets based on the payment schedule you choose is a brilliant idea.
If you pay biweekly, make it a requirement for your workers to submit timesheets every two weeks (or weekly if you want to start early payroll calculations). For salaried personnel, you’ll need to keep track of the days for which you’re paying them.
Employees get paid on the designated payday.
Because each pay date is marked on the pay period calendar, it’s simple to see. You may keep the calendar on your desk or your wall as a reminder. You may also provide extra information or reminders to assist you in remembering other crucial dates. Keep track of the days, and you’ll be able to tell when payday is coming. This is especially useful if you manually handle payroll.
Conclusion
It’s critical to choose the pay period that works best for your company, and it’s even more vital to stick to it. Payroll calendars and charts make it simple to keep track of your pay cycle’s start and finish dates, as well as your pay dates, so you never miss a payday or process payroll for the incorrect time.
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Frequently Asked Questions
What are the four types of pay periods?
A: The four pay periods are bi-weekly, semimonthly, monthly, and weekly.
What is a pay calendar?
A: A pay calendar is a way for an employer to schedule their employees’ salaries and wages. They are often referred to as pay slips or paychecks.
What is the difference between the pay period and pay date?
A: A pay period is typically the length of time an employee’s wages are distributed to them, while payment date is an exact day they get paid. For example, if someone was hired on Monday and their last paycheck was in December, their payment would be split into two periods: September through November or October through December.
