You're seconds away from running your first payroll, when you realize you have one last call to make: the payroll schedule.
A payroll schedule is the recurring timeline you set for paying your employees — how often payday happens (weekly, biweekly, semimonthly, or monthly) and which dates it falls on.
At first glance, this may seem like just a tiny speck in the giant payroll universe. But if you delve a little deeper, there's actually a lot riding on your decision. If you don't pay your team frequently enough, it can be really hard for them to confidently plan for the future. And if you pay them too often, it could backfire too.
Take a deep breath—you've got this. With a little scheduling knowledge up your sleeve, you'll be able to make your pay schedule decision with ease.
Your options for pay frequency
Gusto guide on payroll periods | Monthly | Semimonthly | Biweekly | Weekly |
Frequency (per year) | 12 months | 24 months | 26 (sometimes 27 weeks) | 52 weeks |
Payroll date | End of the month | Usually 1st & 15th or 15th & 30th | Every two weeks usually on Friday | Every week usually on Friday |
Hours per pay period (for hourly employees) | 173.33 | 86.67 | 80 | 40 |
Payroll processing cost | Lowest | Low | Medium-Low | Medium |
Implications to accounting | Lowest | Low | Medium-Low | Medium |
Implications to benefits | Lowest | Low | Medium-Low | Medium |
Processing time | Lowest | Low | Medium-Low | Medium |
Salaried employees | Salaried employees prefer being paid more frequently but the differences are minor. Most companies pay their salaried employees semimonthly or biweekly. | |||
Hourly employees | Lowest preference | Low preference | Preferred | Most preferred |
Weekly pay schedule
Is your staff mostly hourly workers? Then this period may be the best fit for you.
Weekly payroll is popular because it allows your employees to have a better handle on their money, since they get it only a few days after they earn it — a small thing that can meaningfully boost employee satisfaction, especially for hourly workers living closer to paycheck to paycheck.
For example, if you’re a barista in a cafe and work 40 hours one week and 20 hours the week after, there’s probably a reason why you made that scheduling choice. For many people who earn an hourly rate, it’s essential that they get paid in the exact week that they put in so much time.
The downside? Many payroll software providers charge for each payroll you run, so doing it weekly can start to add up if your team is large. It can also suck up a lot of time for the payroll administrator in charge of processing each paycheck — every run means recalculating payroll tax withholding and deposits all over again, 52 times a year instead of 12. However, you can combat these issues by picking a small business payroll service that doesn't charge you for each time you pay your team.
Best for: Hourly employees
# of paychecks: 52
Biweekly and semimonthly pay schedules
These two payroll periods sound identical—but they're actually quite different from each other. Here's a snapshot of each one:
Biweekly means getting paid every two weeks, which usually happens every other Friday. Paychecks reliably arrive on the same day every other week, which can be a relief for many. It's also the next best option for hourly employees who get paid overtime, because it's easy to account for those extra hours since the periods always consist of the same amount of days.
You're probably thinking, with 52 weeks in a year and 26 pay periods, you can't squeeze that into just 12 months. Exactly.
Since each month doesn't always have four full weeks, this schedule means that every year there will be two months with a bonus pay period. This can be inconvenient for accountants because they usually run their reports on a monthly basis. Benefits premiums are deducted monthly too, so without the proper planning, it can cause unnecessary confusion for the person in charge of HR. The same goes for 401(k) plans — if contributions are set as a percentage of each paycheck, that extra pay period can nudge an employee closer to their annual contribution limit than expected.
If a biweekly schedule is speaking your name, check with your accountant and health benefits provider to make sure there are no issues with going this route.
Best for: Hourly or salaried employees
# of paychecks: 26
Semimonthly means getting paid twice a month, usually on the 15th and 30th, or the 1st and the 15th. This is one of the most common choices for workers who are salaried because it's easier on the benefits and accounting side.
The challenge is that since payday could hit on a Sunday one month and a Monday the next, employers have to adapt. That's largely a direct deposit issue — banks only process ACH transfers on business days, so a payday landing on a weekend won't actually reach employees' accounts until the next business day. So if payday falls on a weekend, most employers pay their teams on the weekday that comes before that date.
Best for: Salaried employees
# of paychecks: 24
Monthly pay schedule
This schedule is one of the least popular options out there. Why's that? Because going 30 days without a paycheck is not doable for most folks. Each state also has rules about how often you can pay your team, so in many areas, monthly payroll is not even an option.
The gist is that you can always pay yourself more frequently, but never less than the period your state designates. One thing that doesn't change no matter which schedule you pick: your federal tax filings (like Form 941) stay on a quarterly cadence — payroll frequency and filing frequency aren't the same clock. Take a look at your requirements with this chart from the Department of Labor.
# of paychecks: 12
So which payroll schedule is best for you? It really comes down to the number of hourly and salaried employees you have and how flexible your payroll software solution is. If your service allows you to pay your team at different pay schedules (hourly/weekly, salaried/biweekly or semimonthly), then your employees will get to enjoy all the benefits of each unique period.
Getting paid is a momentous time for your team. And when you pick a payroll schedule that matches up with their needs, it's just another way to boost employee satisfaction and show them how much you value all the incredible things they do.
Wonder what to do now that you’ve run your first payroll? Here’s what could be next.
FAQs
What are the most common payroll schedules for small businesses?
The four most common options are weekly (52 paychecks a year), biweekly (26 paychecks a year), semimonthly (24 paychecks a year), and monthly (12 paychecks a year). Each has different tradeoffs for administrative cost, accounting complexity, and employee cash flow.
Which payroll schedule is best for hourly employees?
Weekly or biweekly schedules tend to work best for hourly employees, since they get paid closer to when they actually work the hours and it's easier to account for overtime pay in periods with a consistent number of days.
What's the difference between biweekly and semimonthly pay?
Biweekly means employees are paid every two weeks (26 times a year), typically on the same weekday, like every other Friday. Semimonthly means employees are paid twice a month (24 times a year) on fixed dates, like the 15th and the last day of the month—so the day of the week varies.
Why is monthly payroll uncommon?
Monthly payroll is one of the least popular schedules because going 30 days between paychecks is difficult for many employees to manage financially. Many states also have minimum pay frequency requirements that make monthly payroll illegal for at least some types of employees.
Can I use different pay schedules for different types of employees?
Yes. Many payroll software services let you run hourly employees on a weekly schedule while running salaried employees on a biweekly or semimonthly schedule, so each group gets the pay frequency that works best for them.
