How to decide what pay schedule is best for your business
When it comes to choosing a payroll schedule for your business, there are a few things to keep in mind:
- Types of employees. If you employ mostly hourly workers, a weekly or biweekly payroll schedule might work best. If you employ mostly salaried employees, a semimonthly payroll schedule may be preferred.
- Employee needs. Failing to take your employees’ needs into consideration while building your payroll calendar can result in low employee morale and a high turnover rate. How often an employee is paid can be just as important as how much.
- Cash flow. Just one late paycheck can cause employees to quit, according to the QuickBooks Payroll powered by KeyPay survey. If you’re a new small business or a business with irregular cash flow, think about how often you can realistically pay employees. When it comes right down to it, getting paid correctly and on time is better than getting paid incorrectly on a more frequent schedule.
- Award requirements. Most industries have awards with specific payroll schedule requirements that business owners are required to meet. These requirements vary by industry and occupation. It’s always a good idea to check with an expert for compliance before making any hard-and-fast decisions about your payroll calendar.
- Time and effort. How much time and money can you dedicate to running payroll? If you don’t have a payroll service provider or an automated payroll system in place, choosing a weekly payroll schedule may be overwhelming. If you have hourly employees, be sure to factor in the time it takes to collect and decipher employee timesheets.
In the end, you need to decide what’s best for your employees and your business. There’s no right or wrong answer, and your choice isn’t set in stone. If your payroll schedule isn’t optimal for your business, you can change it. But you should avoid making changes more than once as it can cause uncertainty and confusion.
Remember, as much as we’d like to think employees work for the sheer love of the job, most of them work to get paid. Paying employees consistently, correctly, and on time is the key to pay schedule success.
*Methodology: In 2018, QuickBooks Payroll commissioned Pollfish to survey 1,000 employees (age 18+) about their payday experiences.