Finances and Taxes

What’s the Best Payroll Schedule for My Small Business?

Danielle Grant Customer Care, Gusto  

You’re seconds away from running your first payroll, when you realize you have one last call to make: the payroll schedule. 

At first glance, this may seem like just a tiny speck in the giant payroll universe. But if you delve a little deeper, there’s actually a lot riding on your decision. If you don’t pay your team frequently enough, it can be really hard for them to confidently plan for the future. And if you pay them too often, it could backfire too.

Take a deep breath—you’ve got this. With a little scheduling knowledge up your sleeve, you’ll be able to make your pay schedule decision with ease.

Your options

Gusto Payroll Periods

[Click to enlarge]

Weekly pay schedule

Is your staff mostly hourly? Then this period may be the best fit for you.

Weekly payroll is popular because it allows your employees to have a better handle on their money, since they get it only a few days after they earn it. For example, if you’re a barista in a cafe and work 40 hours one week and 20 hours the week after, there’s probably a reason why you made that scheduling choice. For many people who earn an hourly rate, it’s essential that they get paid in the exact week that they put in so much time.

The downside? Many payroll providers charge for each payroll you run, so doing it weekly can start to add up if your team is large. It can also suck up a lot of time for the payroll administrator in charge of processing each paycheck. However, you can combat these issues by picking a small business payroll service that doesn’t charge you for each time you pay your team.

  • Best for: Hourly employees
  • # of paychecks: 52

Biweekly and semimonthly pay schedules

These two payroll periods sound identical—but they’re actually quite different from each other. Here’s a snapshot of each one:

Biweekly means getting paid every two weeks, which usually happens every other Friday. Paychecks reliably arrive on the same day every other week, which can be a relief for many. It’s also the next best option for hourly employees who get paid overtime, because it’s easy to account for those extra hours since the periods always consist of the same amount of days.

You’re probably thinking, with 52 weeks in a year and 26 pay periods, you can’t squeeze that into just 12 months. Exactly.

Since each month doesn’t always have four full weeks, this schedule means that every year there will be two months with a bonus pay period. This can be inconvenient for accountants because they usually run their reports on a monthly basis. Benefits premiums are deducted monthly too, so without the proper planning, it can cause unnecessary confusion for the person in charge of HR.

If a biweekly schedule is speaking your name, check with your accountant and health benefits provider to make sure there are no issues with going this route.

  • Best for: Hourly or salaried employees
  • # of paychecks: 26

Semimonthly means getting paid twice a month, usually on the 15th and 30th, or the 1st and the 15th. This is one of the most common choices for workers who are salaried because it’s easier on the benefits and accounting side.

The challenge is that since payday could hit on a Sunday one month and a Monday the next, employers have to adapt. So if payday falls on a weekend, most employers pay their teams on the weekday that comes before that date.

  • Best for: Salaried employees
  • # of paychecks: 24

Monthly pay schedule

This schedule is one of the least popular options out there. Why’s that? Because going 30 days without a paycheck is not doable for most folks. Each state also has rules about how often you can pay your team, so in many areas, monthly payroll is not even an option.

The gist is that you can always pay yourself more frequently, but never less than the period your state designates. Take a look at your requirements with this chart from the Department of Labor.

  • # of paychecks: 12

To see the payroll schedules Gusto customers go with, check out the following breakdown by company size:


So which payroll schedule is best for you? It really comes down to the number of hourly and salaried employees you have and how flexible your payroll solution is. If your service allows you to pay your team at different pay schedules (hourly/weekly, salaried/biweekly or semimonthly), then your employees will get to enjoy all the benefits of each unique period.

Getting paid is a momentous time for your team. And when you pick a payroll schedule that matches up with their needs, it’s just another way to show them how much you value all the incredible things they do.

Updated: November 1, 2019

Danielle Grant
Danielle Grant Danielle Grant is on the customer experience team at Gusto. She currently empowers the onboarding team that serves customers through payroll setup.


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