person circling pay day on a calendar

When Should I Pay My Employees?

When you hire your first employees, you’ll have to decide how often to pay them. The decision should balance your company’s needs and the costs of running payroll with your team’s preferences. You will also need to check out your state’s laws about pay frequency because that might dictate how often you need to pay your staff.

The most common pay schedules in the U.S. are monthly, semi-monthly, bi-weekly, and weekly. According to the Bureau of Labor Statistics, bi-weekly is the most common schedule, followed by weekly.

Monthly

Using a monthly payment schedule, you’d pay your employees once a month, or 12 times a year.

Paying your team once a month will likely be the cheapest option and will take the least amount of time because you only need to do it once a month. But, your workers probably don’t want to wait a month between paychecks, and many states do not allow you to pay your staff that infrequently.

Learn more about your state’s payroll laws.

Semi-monthly

If you choose to pay your employees twice a month, you’ll have 24 pay periods during the year.

Paying your team semi-monthly will help your accounting run smoothly because the last paycheck will typically coincide with the end of the month. Because of this, semi-monthly is a great option for salaried workers.

If you mostly employ hourly employees, semi-monthly pay periods may make it more difficult for you to calculate hours worked – particularly overtime. And it might be harder for staff to make their personal budgets because their net check amounts might not be consistent.

Bi-weekly

Paying your team on a bi-weekly schedule means you’ll pay them every other week. This results in 26 (sometimes 27) pay periods.

Running payroll bi-weekly is a great semi-monthly alternative for hourly workers. Because your pay periods will always start and end on the same days of the week, it will be easier for you to ensure you’re correctly calculating time worked, including overtime. If your employees typically work the same number of hours each week, they will also be able to plan their finances more easily because each paycheck will be for roughly the same amount.

Read also: What is a Pay Period? How Many Pay Periods are in a Year?

Weekly

If you pay your staff weekly, you’ll pay them 52 times a year.

Hourly employees prefer to be paid weekly because it makes budgeting easier. Paying your workers weekly, however, will take a lot more time because you’ll have to sit down every week to process payroll.

Payroll software can make the process easier and less time consuming, so you can get back to business. Learn more about why you should consider switching to payroll software from a manual system.