Every company has got their own personal schedule of paying their employees. At first sight, deciding on your schedule may seem like one of the easiest decisions to make. But, that’s not true! On the contrary, there is a lot that will be affected by your decision. Every business is different, this means that also the payroll schedule is different, and it depends on various factors. If you don´t pay your team frequently enough, your workers might get frustrated. Paying them too often could backfire too with high transfer costs.
Thanks to the customizable payout cards from Juice Banking you can forget about these transfer fees. Juice Banking works with a monthly cost per card. This allows you to focus on the best schedule for the happiness of your employees, and not to choose by the added costs implied by your frequency.
American state laws require a minimum pay period, which means that you can pay more frequently than the minimum, but it is not allowed to pay less! In the U.S., the most commonly used methods are monthly, semi-monthly, biweekly, and weekly. Every schedule has its own advantages and disadvantages. We will give a quick overview of the most popular options.
| Monthly | Semi-Monthly | Biweekly | Weekly | |
| Frequency per year | 12 | 24 | 26 | 52 |
| Date of payroll | End of Month | 1st & 15 / 15th & 30th | Every 2 weeks | Every week |
| Processing Cost | Lowest | Low | Medium-Low | Medium |
| Implications to Accounting | Lowest | Low | Medium-Low | Medium |
| Benefits | Lowest | Low | Medium-Low | Medium |
| Processing time | Lowest | Low | Medium-Low | Medium |
| Hourly Employees | Lowest Preference | Low Preference | Preferred | Most Preferred |
| Salaried Employees | Medium-Low | Preferred | Preferred | Low |
A weekly payroll may still seem a very attractive option for your employees. For hourly paid employees weekly payroll is preferred. Because hourly paid employees mostly are working in an irregular working schedule, with overtime and different shifts. This allows them to have more control over their money. Because, for example, when someone is working overtime, they are doing this for a reason. And they might want to have control over the money right away.
The downside of the weekly option is that most payroll providers charge for each payroll that you run. This means that if you have a lot of employees that these weekly payrolls can add up to a high sum. Another stumbling block is that each time that you run payroll, it can take up a lot of time for your company to process everything. Especially if you need to add overtimes and accruals.
Weekly payroll is best for:
A Biweekly payroll schedule means that your employees will get paid every two weeks on Friday. This is another good option for hourly-paid workers who get paid overtime. For the same reason as the weekly pay: overtime and an irregular working schedule.
For companies paying their employees biweekly, two months out of the year will have three pay periods instead of two. Your accountant must have payroll expense accruals, so costs are recognized in the month the compensation was paid.
Bi-weekly payroll is best for:
A Semi-monthly payroll schedule means that employees are 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 implies more benefits for them and also for accounting. The challenge is that since payday could hit on a Sunday one month and a Monday the next, employers must adapt. So, if payday falls on a weekend, most employers pay their teams on the weekday that comes before that date.
This payroll period might sound identical to the previous one. But don´t get fooled, from an accounting perspective they imply different actions. Your accountant runs monthly reports, not weekly reports. That is why your accounting department may prefer semi-monthly pay periods since the last paycheck of the month will typically coincide with the end of the month.
Benefits also typically run on a monthly basis. Some of your employees may have voluntary deductions for healthcare. With semi-monthly, these deductions are easy.
Semi-Monthly payroll is best for:
This last schedule is one of the least popular options out there. 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.
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 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.
With the payout cards from Juice Banking you provide your employees with instant access to their money. You decide which payroll schedule is best for your company, and we will make sure that your employees are getting paid on time!