Congratulations on hiring your first employees! When building a business, every employer will face innumerable decisions, which will help set the very foundation of that business. One such decision is to contemplate the payment process. Like how often should you be paying your employees? Any payroll processing company will get this question a lot. That’s because it’s difficult to provide one answer. The truth is employers can choose different times for a payment period. Whether they own a small business or are an independent contractor, the payment will vary. Here, employers will learn the ins and outs of typical pay periods.
How Often Do Employees Get Paid?
For an employer to establish a stable and practical relationship with employees, it’s critical to offer them a consistent and reliable source of income. Based on the state the business is situated in, the payment length of time will vary. There are a couple of options to go for. These include:
- Once a week (weekly)
- Every two weeks (biweekly)
- Twice a month (semimonthly)
- Once a month (monthly)
One survey published by the American Bureau of Labor Statistics evaluated the earnings, hours, and employment data in 900 industries. The goal was to see which type of payroll was more used in businesses in 2020. Based on the CES results, biweekly was the most used pay period, with roughly 43% of American private establishments paying their workers every 2 weeks, followed by the weekly pay period, which was recorded to be at 33.3%. Once a month and semimonthly frequencies were less practiced, with semimonthly holding 19% and monthly at 4.7%.
What Pay Period Is the Best?
From an employer’s standpoint, the extra cash flow and expenses will set the course for the company’s pay period. Whether that is taking care of bank fees, running payroll, or sending checks via mail. If you are looking to convert a percentage of each paycheck into bitcoin, feel free to use crypto payroll. Some employers are looking to make the most of cryptocurrency, which can be a viable alternative. Whereas from an employee’s perspective, the more often, the better. But, when it comes to selecting a preferred pay period, it is critical to take a look at the bigger perspective. Each payment time comes with its own pros and cons.
Once a Week
With a payment frequency of 52 paychecks annually, a weekly pay period is a go-to choice for a major portion of manufacturing and construction companies. Mainly for staff paid by the hour. Employers choose one day of the week, most often Friday or Thursday, to carry out the payments.
- Short delay
- Highly appealing to the staff
- Accommodates the business’s turnover
- In certain cases, it can cost more to run a payroll
Every Two Weeks
This method offers 26 to 27 paychecks annually (especially with a leap year), and the staff obtains their wages biweekly. By curbing the time spent processing payrolls, the biweekly payment option decreases the odds of payroll errors, making it a practical choice for a significant portion of companies.
- Frequent wages
- Easy to budget
- Creates consistency
- Budgeting can prove a challenge
Twice a Month
The 24 paychecks a year can bypass the three checks a month dilemma and offer employees a notable salary.
- Simplified monthly budget
- Larger amount than a biweekly wage
- The payments can be issued on various days throughout the month
Once a Month
The 12 paychecks annually are not as frequently used methods as some of the other options. The staff gets their payment often on the exact same day every month.
- Big paycheck
- Simple payroll process
- Reduces the staff’s cash flow
Business owners have various time frames to pick when it comes to paying their employees. By evaluating all of them, you can find the one that would best serve your business. Currently, the biweekly option topples the rest of them. Choose the one that’s best tailored to your needs.
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