Weekly, Bi-Weekly, Bi-Monthly, and Monthly: Your Guide to Choosing the Right Payroll Program

As a payroll professional, you will likely encounter different companies with different payment policies. Bi-monthly is very common among salaried workers, usually with payouts happening on the first of the month and the 15th day of the month. Sometimes companies prefer to pay hourly employees bi-weekly and in some cases, employees are paid weekly.

In addition to individual company preferences, there are also rules by country and by state to consider. For example, in New York, manual workers must be paid weekly.

Monthly Payroll
Common within the U.S. educational industry, employees are paid once a month, on the same day each month. This is extremely time efficient for payroll professionals, as they will only process payroll once per month. However, even though you are processing payroll only once per month, it’s recommended to save time and headaches by checking in on timecards each week along with vacation and sick time.

This is a simple option for payroll, with employees paid typically on the 1st and 15th of the month. The option provides consistent cash flow for employees and is effective timewise for payroll professionals.

The downside to semi-monthly payments is if you need to apply overtime for hourly workers. Since the semi-monthly payments don’t always cover the same numbers of days, under semi-monthly policies, payroll clerks have to keep track of extra workdays at the beginning of each week.

Bi-Weekly Payroll
Under this schedule, employees receive 26 paychecks per year. In most cases they are paid twice a month, but there are about two months per year in which they are paid three times per month.

This is a common schedule because it’s easy to work around and is predictable, with employees being paid bi-weekly on certain days. This method is very time efficient for small businesses. Employees also enjoy the consistency of bi-weekly pay days.

Uncommon Circumstances
Occasionally when using bi-weekly payroll, a calendar year will include 52.1786 weeks, with an extra pay period for those who fall under bi-weekly pay, resulting in 27 paychecks that year, rather than 26.

Weekly Payroll
Comprised of 52 pay periods per year, this type of payroll cycle is ideal for employees who work overtime and whose work schedules are different each week, including for construction and other skilled trade industries.

Employees paid per week typically submit time sheets at the end of each week and are paid the following week. This is a quicker turnaround for payroll professionals, with more unpredictability each week.

Since weekly payroll requires more time to be spent on payroll, it is less common for salaried employees, as its faster and more convenient to pay salaried employees twice per month.

Things to Consider
If your company is considering changing its payroll policy, there are several factors that could make an impact.

Software and Budget
Payroll software providers may charge companies each time payroll is processed. For this purpose, a company could profit more, by providing less pay dates and implementing a bi-monthly or monthly payroll plan.

Employee Happiness
A company may also choose to value the type of payroll that will provide the most employee satisfaction. Employees may prefer a more consistent payroll cycle. This could also play an important role in the company’s overall performance in terms of recruitment and retention of top, quality talent.

Changing Your Payroll Policy
If your company decides to change its payroll policy, here are some additional factors to consider.

  1. Direct Deposit
    If your company offers direct deposit, make sure to contact all necessary financial institutions to make sure deposits are not interrupted during transition.
  2. Communication
    Be sure to notify your employees far in advance about the changes. Outline how the changes will affect them and on what dates.
  3. Rules/Regulations
    Make sure to check with regional/local laws to make sure your changes are compliant. If you are in the U.S. or you are working with U.S. employees, the S Department of Labor’s website lists each state’s requirement.
  4. Time Considerations
    Be sure to outline how much extra time or how much time might be saved among your payroll team, depending on the changes.

Choosing your payroll strategy is a very individualized choice based on each companies’ business needs.

We recommend selecting a method and then evaluating its success after six months. As your business grows, you may also determine that you need to select a different method or employ a hybrid method – meaning separate pay dates for those who are salaried versus those who are hourly.


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