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How to Choose the Best Pay Schedule

By Trevor Sheffield

March 23, 2023

Selecting a pay schedule for employees is a tough decision to make, especially if you’re running a small business. However, keeping your employees happy is paramount to success in any industry. Workers who know when to expect their next paycheck are happier and more motivated at work. As a leader at your company, consider which of the following pay schedules will work best for your employees and how you can make it most effective.

The Most Common Pay Schedule

  • Weekly. This pay schedule involves paying your workers on the same day every week. When all is said and done, that’s 52 payments going to employees every year. 
  • Biweekly. When you pay employees biweekly, you pay them on the same day of the week, every other week. That means every other Friday, which is usually industry standard, your employees will receive their paycheck. This totals to approximately 26 payments every year.
  • Semimonthly. Semimonthly payments happen when your employees are paid on the same two days every month, often two weeks apart. This totals to 24 payments every year.
  • Monthly. Freelancers are most often paid on a monthly basis, but other employees can be too depending on the federal and state regulations you’re obligated to follow. This amounts to 12 payments per year.

Factors to Consider

As you’re choosing the best payroll schedule for your company and employees, there are a variety of factors to consider.

  • First, assess the federal and state pay regulations you need to comply with. It’s important to know how often you are legally required to pay all of your workers. In some states, it must be at least twice a month. Do your research before you make any big decisions.
  • Consider whether your workforce is made up of salaried employees, hourly employees, freelancers, or a combination. While freelancers are most often paid on a monthly basis, per industry standard, hourly employees most often need to be paid at least twice a month in order to keep up with their bills. Paying employees at a less frequent rate can bring down the employee experience and make your workers unhappy.
  • Review the time tracking technology you’re using. If your software is out of date when it comes to tracking employee hours and automating payroll, there’s a higher chance of your employees or your company as a whole losing money. This is the last thing you want happening, so audit your systems frequently and don’t be afraid to upgrade when necessary.
  • Take a look at your cash flow, especially if you run a small business. Knowing when you can afford to pay your employees is a necessity when choosing which pay schedule works best for you.

Remember Your Hourly Employees Pay Schedule

Hourly employees are often the ones who suffer most when an unsustainable pay schedule is put into place. Those who work for hourly wages don’t always have a stable income to rely on every paycheck, especially if their schedule changes frequently. Still, these workers are the backbone of many companies. It’s important to treat them right. We highly recommend using a weekly or biweekly payment schedule if you employ hourly workers. This leads to higher employee engagement and meets industry expectations.

Which pay schedule do you think will work best for your company? Consider the factors at play as you prepare to make a decision.



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