It’s a difficult time for employers and employees alike, but many are trying to keep their businesses running or getting ready to reopen despite the serious risk. Unemployment is surging right now, and plenty of companies are jumping to take advantage of the crisis by hiring new employees. Is your company one of them?
Whether you’re hiring new employees to fill new demands related to the current crisis or increasing your workforce for another reason, it’s important that you have a payroll plan in place. If you’re confused about how employee payments work or interested in changing how you pay your employees, it’s time for you to learn.
There are a variety of reasons why you might consider one pay schedule over another. To help you figure out what works best for you, here are some great tips on how often employers should pay their employees.
Pay Frequency Requirements by State
The first thing you should consider when working up a pay schedule for your company is that pay frequency requirements vary by state. A couple of states, like Arizona and Maine, require that employers pay in the middle of the month, every 15 or 16 days.
Overall, though, you’re able to make the choice within the bounds of the law, but make sure to familiarize yourself with your state’s regulations to avoid potential legal trouble!
Read on for details on the options you have.
Making Employee Payments Every Month
A common payment schedule is paying your employees every month. Salaried workers often receive monthly base direct pay, and it’s common that wage laborers do too.
You could argue that making monthly payments is easier because you don’t have to calculate payroll as frequently. Another benefit of paying workers monthly is that you can save on printing costs if you have many employees.
However, you’ll have more numbers to keep track of if you wait until the end of each month to pay. Luckily, there’s a number of payroll software options to help you out.
Making Employee Payments Every Two Weeks
“How often is bi-monthly?” is a common question. Bi-monthly means paying twice a month, and generally, this means that employers pay their workers every two weeks.
While many employers simply pay every other Friday or on another regular weekly schedule, a bi-monthly employee payment plan doesn’t have to be based on the day of the week.
If it’s convenient to pay your employees on certain days of the month, instead, getting paid on the 15th and the 30th is typical. Awkwardness can arise, though, if you aren’t able to make payments on non-business days. If this is a payment schedule you’re considering, think about what your plan is if the 15th or 30th (or whichever days you choose) fall on weekends or holidays.
Paying Employees Every Week
Some employers are changing their pay schedules because times are tough and workers struggle to pay the bills. Generous employers take steps to protect the workers that keep their businesses afloat, and one option to consider is paying employees every week.
Paying employees weekly is a good pay strategy if your business has a high employee turnover rate. One advantage, in that case, is that you won’t have as much hassle getting paychecks together when paying employees who quit or are fired. Some examples of high-turnover businesses that pay weekly are some canvassing organizations and companies that work with freelancers.
Keep in mind if you send paper paychecks to your workers that printing costs add up if you have a large number of employees. For this reason, weekly employee payments are best used only if your business model necessitates it. However, you can avoid this problem by going paperless.
Jobs That Pay Every Day
Jobs that pay daily aren’t very common, but they’re out there. Employers that pay daily usually work with transitory workforces and gig workers, like migrant farmworkers, online translators, and survey-takers.
If you haven’t heard much about paying employees daily, that’s because in general, it isn’t too practical and most don’t do it. One reason many avoid paying daily is that if you print physical paychecks, the printing costs can add up.
In certain circumstances, though, it works well. For the most part, daily payments are best for online businesses, or companies with small workforces.
As you might imagine, this is the easiest option in terms of math—but only at the outset. While you won’t have to take the trouble of adding together all the hours each employee works, you will have to add everything together when it comes time for you to file taxes, so don’t slack off on keeping detailed records.
Working with an accountant, hr software for small business or payroll software helps a lot. If you aren’t careful, you could make a mistake that leads to getting audited. Nobody wants that!
In Search of More Business Advice?
Making employee payments often intimidates new business owners and those who bring on large numbers of new workers. Now that you’ve read about how often to pay your workers, are you interested in learning more business tricks and tips?
Even if you already have a business degree, continuing to learn throughout your career will put you ahead of your competitors.
To help you along on this journey, we have plenty of articles available for you to read. Whether you want to learn more about employer-employee interactions or about something totally different, like building a reputation for your brand, we have you covered. Enjoy!