This is probably the most appropriate time to evaluate your payroll schedules. You can re-consider if the pay frequency you are using is the right one or should you change it in New Year.
While evaluating payroll service frequency, you must compare and contrast all possible options and take decision that is the most appropriate for you and your employees.
Irrespective of the size and shape of your company, payroll processing is no more a difficult or tedious task. You can simply depend on your online payroll service provider to do the job for you for any pay frequency along with dedicated professional support.
There are four frequency options, Monthly, Semi-Monthly, Bi-Weekly and Weekly. When you evaluate your frequency, make sure you have correctly examined the pros and cons of all the options.
To make your decision-making easier, Here are a few facts and details associated with each type:
- Rate: Every year, you will issue 12 paychecks to every employee
- Date: Usually, it is the last day of the month
- Total number of hours: 173.33
- Rate: Every year, you will issue 24 paychecks to every employee
- Date: Could be 1st and 15th or 15th and last day of the month
- Total number of hours: 86.67
- Rate: Every year, you will issue 26 or 27 paychecks to every employee
- Date: Employees will be paid every two weeks, usually on Fridays
- Total number of hours: 80
- Rate: Every year, you will issue 52 paychecks to every employee
- Date: Employees will be paid every week, usually on Fridays
- Total number of hours: 40
Along with the details regarding different options, another critical aspect is the cost associated with your payroll processing. The more times you process your payrolls, more the costs are. That is why; monthly payrolls involve least costs while weekly payrolls have highest costs.
Although, the final decision maker is the employer itself, but employees must be kept in mind while making the decision. Full-time employees prefer getting salaries more frequently, and so most companies adopt the semi-monthly or bi-weekly payment schedules. While hourly employees (part-timers) go with any kind of schedule that suites their requirement.
Though monthly schedules look best with company perspective, it can put employees under financial crunch. With a single paycheck for month, employees may find it difficult to manage their finances effectively.
Conclusively, it can be said that every payroll schedule has its pros, cons and costs, and the employers must take decisions considering all the available circumstances.