You have decided what type of worker will suit your business needs, but now its time to think about payroll frequency.
For employers, payroll frequency, determines how often employees are paid and the amount of time between pay days. For employees, it is the number of paychecks he or she will receive during the year.
Factors that will play a role in your decision, will be:
1. The type of Industry
2. Number of employees
3. Type of workers
4. Legal Requirements
There are four types of frequency: Weekly, Bi-Weekly,
Semi- Monthly and Monthly.
1. Weekly is every week on the same day of the week. For example, hair salons may pay their assistants every Friday. Employees usually favor this frequency because it provides them with pay the most frequently.
Depending on the payroll provider, employers may have higher cost of processing payroll.
2. Biweekly is every other week on the same day of the week. Most companies favor this frequency and it is easier to handle overtime with non-exempt employees. Employees will receive two paychecks a month, except there will be two months out of the year they will receive THREE!!!!
3. Semi-monthly is two times per month, such as the 1st and 15th of every month. It can cause confusion with employers and employees because the dates could fall on weekends and its harder to track overtime.
4. Monthly is the same date each month. It is probably the least favorite for employees because income is only coming in once a month. For employers, there will be a huge cash outflow every month but transaction costs will be the cheapest.
Whatever choice you make, please be sure to clearly define your company's work week, pay periods and corresponding pay dates in advance to ensure employees understand their hours and when they are getting paid.
King HR Services can assist with your company's process of deciding the best payroll frequency along with managing payroll with a free consultation. If you have questions please feel free to call (941)-518-9679 or email at email@example.com