Tens of thousands of businesses run payroll through Gusto today. We’re excited to share that weekly payroll vs. the typical biweekly paycheck has been growing in popularity among our customers. We believe offering a weekly payday—at no extra cost—makes life better for millions of US employees.
Why is weekly payroll important?
To answer that, we have to give a little background on pay schedules in the United States.
Most companies run either semi-monthly payroll (twice per month, for example, every 15th and 30th) or biweekly payroll (every two weeks on a specific day of the week, usually every other Friday). When you pay employees depends on your preferences.
Retain Your Employees
Generally speaking, employees prefer getting paid more frequently because it’s the best alignment of work and earnings.
Hourly employees, in particular, prefer getting paychecks weekly. A weekly payroll schedule better matches an hourly employee’s cash flow needs. If an hourly employee has an irregular working schedule with overtime pay, weekly payroll best reflects the compensation they’ve earned for number of hours worked per week. For example, if an employee works 60 hours one week and 20 hours the next, a weekly pay cycle makes sure the employee is paid that valuable overtime in the first week when they may need it most.
Weekly pay dates also allow newly hired employees to be paid more quickly. (That’s a win for employee happiness!) Combine this with a Monday start date for new employees and you can avoid the admin work that comes with prorating a paycheck.
Frequent, reliable cash flow is a good thing. If you’re in a competitive industry, or an industry with high turnover, weekly payroll could help you or your human resources team to attract and retain employees.
Be An Industry Leader
Industries with cash flow that revolves more on a weekly rather than monthly basis—such as restaurants and construction—also benefit from a weekly pay frequency. It’s a cash flow win for both the employer and the employee.
We are inspired by small business owners who care about the financial welfare of their employees because we think these builders make stronger, longer-lasting businesses. One such business is Rockwall, Texas-based San Martino Winery & Vineyards. Owner Emilio Ramos articulates:
“We prefer weekly payroll due to having mostly hourly employees. It is easier on their finances and cash flow.”
Simplify Your Budget and Improve Cash Flow
Unfortunately, most companies don’t offer weekly pay periods even if their employees would benefit from it. 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, these fees can add up to a lot of extra money. Fortunately, Gusto never charges per payroll run; we have a transparent, flat monthly fee per employee.
The reality is a biweekly pay schedule can actually throw off your company’s cash flow. With fifty-two weeks per year, there are 26 biweekly payments, with two months per year having an additional third pay run that. All too often, cons of biweekly pay periods are that those outlier pay periods aren’t included in the budget, which can lead to cash flow problems. Sometimes a year can have 53 Fridays instead of the usual 52 Fridays. That happened in 2021, because the year started on a Friday in non-leap year. When that happens, a business that runs biweekly payroll could have 27 pay periods. That’s three months with an additional pay run to fit into a budget.
Standardize your processes
Another stumbling block for weekly payroll is time. 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. Gusto has a number of features built in to make this a simple process. Gusto offers time tracking that is reviewed and approved inside the software itself. If you have standard hours, Gusto will even automatically process the payroll for you with our AutoPilot feature, creating a hands-off experience. We even integrate directly with most major accounting software.
Weekly pay runs also encourage employees to turn in their timesheets in a consistent and timely manner for work weeks. You’re less likely to have employees who forget to update their timesheets on the “off” weeks if you pay weekly. This means less time spent tracking down missing hours at the last minute. Having weekly payruns on the calendar weekly standardizes and simplifies your payroll process so you can go back to running your business!
Sharlane Chase from Seattle-based My Buddy Dave the Plumber explains:
“In the trades (construction, plumbing, electrical), it’s typical for workers to get paid weekly. Historically, in the construction industry, people can get burned. Projects can sometimes go belly up and workers don’t get paid, so people get nervous. People come in, they do the work and at the end of the week, they get the pay and they go. That’s the way it’s always been done.”
We strongly believe employees deserve to be paid promptly and without complications. Weekly payroll accomplishes this for tens of millions of hourly workers, and with Gusto’s time tracking features, Autopilot capabilities, and accounting integrations companies are enabled to do that without any extra effort or cost.
Unfortunately, most companies don’t offer weekly pay periods even if their employees would benefit from it. 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, these fees can add up. Fortunately, Gusto never charges per payroll run; we have a transparent, flat monthly fee per employee.
The Gusto Guide to 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 a Friday | Every week, usually on a Friday |
| Hour 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 |
