It may be common for employers to pay their employees weekly, though there are several options available to you! It’s worth exploring these options to see what works best for both your team and your business. The most commonly used payment frequencies are:
- Weekly (52 times a year)
- Bi-weekly (26 times a year)
- Semi-monthly (24 times a year)
- Monthly (12 times a year)
Every business is unique thus some payment frequencies will work better than others. It’s also important to note that some businesses might use multiple pay frequencies for employees such as weekly for hourly employees and semi-monthly for salaried employees.
Weekly (52 times a year)
Employees will receive their wages once a week, typically on a Thursday or Friday. Weekly payments are usually made for the previous week’s work and are used primarily when an employee is paid by the hour. Weekly payments are very popular among employees because getting paid more frequently makes it easier to budget. For employers there are pros and cons. Paying employees weekly can spread the cost of the wage bill and prevent large sums coming out of your account in one go, though this increased frequency of payment can also increase the cost of processing the payroll and mean that more time has to be devoted to this task
Employees will receive their wages once every two weeks (aka once every other week). Bi-weekly payments are also very popular among employees because getting paid more frequently makes it easier to budget. In some months employees may receive three paychecks instead of two.
Semi-monthly (24 times a year)
Employees will typically receive their wages on the 15th and last day of the month. Semi-monthly payments make it easy for businesses and employees to budget, and the process may be simpler than bi-weekly payments because pay dates tend to land on the same dates every month, and there are no issues related to how many days are in each calendar month. This payment frequency is typically used for employees in a salaried position or in companies that have fairly even cash flow each month.
Monthly (12 times a year)
Employees will typically receive their wages on the same day each month (such as the first, last or 15th day of the month). Monthly payments means reduced payroll frequency, which could save the company time and money (plus it will simplify the process of paying employees). If you employ workers based on flexible contracts with hourly rates, this option may also not be ideal as this payment frequency is typically used for employees in a salaried position or in companies that have fairly even cash flow each month.
Using Multiple Pay Schedules
If you have employees that work in different areas or get paid in different ways (think hourly and salary) then using multiple pay schedules might work for you. For example, if you have salaried and hourly employees you can pay the salaried employees semi-monthly and the hourly employees every week.
Which option is best for me?
Hourly employees tend to prefer being paid more frequently while salaried employees are used to being paid less often. Finding a balance between satisfying your employees and coming up with a cost-effective solution is the best option. Weigh up the pros and cons, and choose a system that suits your business and fits in with employee expectations.