Pay Periods: A Complete Guide to Payroll Schedules and Requirements

The recurring length of time over which employee time is recorded and paid. Common pay periods are weekly, bi-weekly, semi-monthly, and monthly.
Jimmy Law
Jump to

What Is a Pay Period?

A pay period is the recurring length of time over which employee time is recorded and paid. Common pay periods include weekly, bi-weekly, semi-monthly, and monthly schedules. The pay period you choose affects cash flow, payroll processing workload, and employee satisfaction.

For businesses with hourly workers and shift employees, selecting the right pay period is an important operational and financial decision.

Types of Pay Periods

Weekly Pay

Employees are paid every week, typically on the same day (e.g., every Friday).

Bi-Weekly Pay

Employees are paid every two weeks, resulting in 26 pay periods per year.

Semi-Monthly Pay

Employees are paid twice per month, typically on set dates (e.g., 15th and last day of month).

Monthly Pay

Employees are paid once per month, typically on a set date (e.g., last day of month).

State Requirements for Pay Frequency

While federal law doesn't mandate a specific pay frequency, many states do. Some states require at least semi-monthly pay, while others specify different frequencies for different types of workers.

Examples:

Always verify your state's requirements before establishing pay periods.

Choosing the Right Pay Period

Consider Your Workforce

Administrative Capacity

More frequent pay periods mean:

Cash Flow Management

Consider how pay frequency affects your cash flow:

Industry Standards

Look at what's common in your industry. Using a standard pay frequency makes you competitive for talent and meets employee expectations.

How Pay Periods Relate to Overtime

Pay periods affect overtime calculation in important ways:

Workweek vs. Pay Period

Overtime is calculated based on the workweek (a fixed seven-day period), not the pay period. The two don't have to align.

Example: If your workweek runs Sunday-Saturday but your bi-weekly pay period runs Monday-Sunday every other week, you must track overtime based on the workweek regardless of when the pay period ends.

Implications

Pay Period Start and End Dates

Establishing a Workweek

Choose a fixed seven-day period as your workweek (e.g., Sunday 12:00 AM through Saturday 11:59 PM). This determines when overtime is calculated and must remain consistent.

Setting Pay Periods

Once you've defined the workweek, establish your pay periods:

Pay Date vs. Pay Period End

The pay period end date is the last day of the period being paid. The pay date is when employees actually receive their pay—usually several days after the period ends to allow for processing.

Example: Bi-weekly pay period ending Sunday, March 10th might have a pay date of Friday, March 15th.

Transitioning Between Pay Periods

If you need to change your pay frequency:

Legal Considerations

Employee Communication

Clearly explain:

Transition Period

You may have a short pay period during the transition:

Pay Period Best Practices

Document Your Policy

Include in your employee handbook:

Communicate Clearly

Ensure employees understand:

Use Consistent Pay Dates

Pick a regular payday (e.g., every other Friday) and stick to it. Consistency helps employees plan their finances.

Plan for Holidays

Decide how you'll handle paydays that fall on holidays:

Communicate your policy and give employees advance notice of holiday-affected paydays.

Track Time Accurately

Use systems that:

Pay Period and Employee Satisfaction

More Frequent = Higher Satisfaction

Research shows employees generally prefer more frequent pay:

The Bi-Weekly Sweet Spot

Bi-weekly pay balances employee needs with administrative efficiency:

Semi-Monthly Challenges

While semi-monthly works well for salaried employees, it can be problematic for hourly workers:

Technology and Pay Periods

Modern payroll and time tracking systems help manage pay periods:

Automated Calculations

Software calculates pay automatically based on:

Time Tracking Integration

When time tracking integrates with payroll:

Employee Self-Service

Employees can:

Multi-Location Management

For businesses with multiple locations, systems should:

Pay Period Record-Keeping

The Fair Labor Standards Act requires employers to keep payroll records for at least three years, including:

Accurate pay period records are essential for:

Common Pay Period Mistakes

Calculating Overtime Incorrectly

Remember: overtime is calculated by workweek, not pay period. Don't average hours across multiple weeks.

Inconsistent Pay Dates

Changing paydays frequently creates confusion and dissatisfaction. Establish a consistent schedule.

Not Planning for Processing Time

Don't make the pay date the day after the period ends. Build in adequate time for time tracking, approvals, and payroll processing.

Ignoring State Laws

Pay frequency is regulated at the state level. Ensure your pay periods comply with minimum frequency requirements.

Poor Communication

Employees need to know:

The Future of Pay Periods

Trends affecting pay periods include:

On-Demand Pay

Some companies now offer daily or on-demand pay options where employees can access earned wages before the official payday. While popular with employees, these programs require careful setup to maintain compliance.

Shorter Pay Cycles

Technology makes more frequent pay periods feasible with less administrative burden.

Flexible Pay Options

Employees increasingly want control over when and how they access their earnings.

Compliance Focus

As wage and hour enforcement increases, accurate pay period tracking and documentation becomes even more critical.

Choosing the right pay period and managing it effectively is foundational to payroll compliance and employee satisfaction. Whether you run weekly, bi-weekly, semi-monthly, or monthly payroll, having clear policies, accurate time tracking, and good communication ensures everyone gets paid correctly and on time.

‍

Fast to set up. Easy to use.
Get your team up and running with Breakroom in 60 seconds. Or schedule a free, personalized demo today.
Try for Free
Book a demo

Explore AI Summary

The swirl logo representing OpenAIThe star icon representing GeminiThe icon representing PerplexityThe starburst icon representing Anthropic
// Function to update active link function updateActiveLink(activeSectionId) { // Remove active class from all links navigationLinks.forEach(function(link) { link.classList.remove('is-active'); }); // Add active class to the corresponding link var activeLink = document.querySelector('a[href="#' + activeSectionId + '"]'); if (activeLink) { activeLink.classList.add('is-active'); } } // Set up intersection observer for scroll-based active states if (navigationLinks.length > 0) { var observerOptions = { root: null, rootMargin: '-20% 0px -80% 0px', // Trigger when section is 20% from top threshold: 0 }; var observer = new IntersectionObserver(function(entries) { entries.forEach(function(entry) { if (entry.isIntersecting) { updateActiveLink(entry.target.id); } }); }, observerOptions); // Observe all H2 sections headers.forEach(function(header) { observer.observe(header); }); }