How Often Should You Pay Your Employees?

On what pay schedule should a small business pay their employees

Hiring employees is a big accomplishment for any small business. If you’re like a lot of small business owners, you may be wondering how often you should pay your employees. It’s essential to select a payroll schedule that works best for both your employees and your business.


How Often Should You Pay Your Employees?


Federal and State Payment Schedule Requirements

The IRS does not regulate the frequency or number of pay periods; however, some states have a minimum payment frequency. Typically, the minimum payment frequencies are semi-monthly, but certain states are more specific than others.

Both federal and state laws require that small businesses pay their employees at regular intervals. A company cannot pay an employee weekly and then only once the following month. Regardless of your payment schedule, the time between pay periods must be at regular intervals.


Types of Pay Schedules


Payroll is distributed on the same day of each week. Most companies pay their employees on Friday for the week previous. Weekly Payroll Frequency: 52 Paychecks a year


Payday is the same day every other week and employees are paid for the two previous weeks or the next two weeks. Bi-weekly Payroll Frequency: 26 Paychecks a year


Employees are paid on the same days of each month. For example, the 1st and 14th of the month. When paydays land on either a Saturday or Sunday, employee payments will be pushed to either Friday or Monday. Semi-Monthly Payroll Frequency: 24 Paychecks a year


Payments are on the same day every month, typically the first or last day of each month. Monthly Payroll Frequency: 12 Paychecks a year


Semi-Monthly vs. Biweekly Payroll

Employee celebrating pay day The difference may seem minor, but there are very distinct advances and costs to either pay period for both the employee and employer. Normally small businesses run monthly reports, not weekly. This is why most companies prefer semi-monthly pay periods since the last paycheck of the month will coincide with the last day of the month.

Also, companies paying their employees biweekly have two months out the year where employees have three pay period instead of two. Be mindful of this so you do not accrue extra payroll expenses.

One benefit of a biweekly pay schedule is that calculating overtime for hourly employees is easier. Small businesses running on a semi-monthly payment schedule need to plan for extra employee hours between pay periods.


Advantages of Weekly Pay Schedules – Advantages of Monthly Pay Schedules

If you’re running your business yourself, you may be wondering about the advantages of weekly pay schedules vs monthly pay schedules. Weekly pay schedules are most often used by the construction and plumbing industries. This option is highly preferred by most hourly employees because it helps with cash flow. Typically, monthly pay schedules take businesses the least amount to process.  


PayWow’s Flexible Payment Schedules

As a small business owner, we understand that you need to choose the best payroll schedule for your business type and employees. This is why we offer your business customizable pay schedules based on your needs. Pay your staff weekly, biweekly, semi-monthly, or monthly–whatever suits your business. We support both your hourly and salaried employees.

Need to run off-cycle payroll? No problem! With PayWow there is no need to wait until the next pay period to pay your employees simply run multiple off-cycle payrolls at any time!


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