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How to Choose a Payroll Schedule – Infographic

Payroll schedule infographic snip

Most companies can choose which payroll schedule they want to use, depending on the state in which they operate (check here for more info: payday frequency requirements by state). Four options are allowed in the US, including: weekly, bi-weekly, monthly, and bi-monthly. Each option has specific benefits. This payroll schedule infographic should help business owners get a handle on the right choice for their company.

Weekly Payroll Schedule

Paychecks come on a set day of the week.

Pros

  • Weekly overtime is easy to calculate since the workweek should match the pay period.
  • Employees don’t have any problem understanding overtime calculations.
  • Employees living paycheck to paycheck prefer getting weekly payroll checks.
  • It is required in some states for certain occupations.

Cons

  • Most payroll companies charge to run payroll.
  • This creates more work for the accountant who has to calculate monthly payroll taxes, benefits, accruals, etc.
  • Paychecks are small, which can be hard to manage for most employees.

Bi-Weekly Payroll Schedule

Paychecks always come on a set day of the week.

Pros

  • Weekly overtime is easy to calculate since the first day of the workweek should match the first day of the pay period.
  • Employees who make overtime regularly usually prefer biweekly paychecks.
  • Employees don’t have any problem understanding overtime calculations.

Cons

  • This creates more work for the accountant who has to calculate monthly payroll taxes.
  • Two months out of the year there are three paychecks so that is extra work for the accountant twice a year.
  • Paychecks fall on different dates throughout the month, which can make it difficult for employees to budget and to schedule automatic bill payments.

Semi-Monthly Payroll Schedule

Paychecks always come on a set date of the month.

Pros

  • This is the most convenient option for salaried employees since they don’t make overtime and don’t worry about confusing calculations.
  • Twice monthly paychecks make it easy to schedule bill payments with employees’ banks.

Cons

  • It can be hard for hourly employees to understand overtime calculations since part of a workweek often falls in a previous pay period.
  • Employees might complain to managers that their overtime is incorrect, when it is actually fine.

Monthly Payroll Schedule

Paychecks always come on a set date of the month.

Pros

  • Running payroll is less frequent and so it’s cheaper.
  • Payroll matches up with monthly payroll taxes and benefits.

Cons

  • Monthly payroll is not allowed in many states so it’s not widely used.
  • Monthly paychecks can be difficult for budgeting for lower wage workers.

 

payroll schedules infographic

Embed this infographic on your site with this embed code: <div style=”clear:both”><a href=””><img src=”https://www.timesheets.com/blog/wp-content/uploads/2017/01/new-payroll-schedules-infographic.png” title=”Payroll Schedules at a Glance” border=”0″ /></a></div><div>Courtesy of: <a href=”http://timesheets.com/”>Timesheets.com</a></div>

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