A pay schedule is the combination of two things: a pay period and a pay date. The pay period refers to the recurring length of time between one payroll run and the next. The pay date refers to the day your employees get paid.
There are a few things to consider when selecting a pay schedule for your company:
The frequency of pay dates
This refers to how often your employees get paid. Common pay frequencies include weekly, biweekly (every other week), semimonthly (twice a month), and monthly.
The delay between the pay period and the pay date
If you have salaried employees, you probably won’t have a delay between the end of the pay period and the pay date because you already know how much you’re going to pay them. Their salary is split between pay periods, so the amount you pay them never changes.
But if you have hourly employees, you may need a delay between the end of their pay period and the pay date. This time allows you to gather their hours and process your payroll accurately. This practice is very common for hourly employees and is called getting paid “in arrears.”
Consider state law
Each state has its own laws around what is a compliant pay schedule. These laws typically govern how long the delay between the pay period and the pay date can be, as well as how frequently you must pay certain types of employees. It’s important to check the laws in your state to make sure you are staying compliant when you pay your team.
Once you choose your preferences for the pay period and date (and make sure they are legal in your state), you are all set! Go forth and pay your employees.Updated September 26, 2017
This article provides general information and shouldn’t be construed as tax advice. Since tax rules may change over time and can vary by location and industry, please consult a CPA or tax advisor for advice specific to your business.