Payroll frequencies will vary with every company and oftentimes companies will process two or more separate frequencies for different groups of employees, so here is a quick guide to lay out the various options available:
Running your payroll on a weekly basis is one way to attract top talent, however it does cut into your company profit overall. When you process payroll on a weekly basis it means your payroll department (or payroll software provider) is spending more time each month prepping for each payroll. The money you spend in labor and resources to run 52 payrolls each year definitely adds up over time, but is the most preferable for hourly employees.
For those of you who are not familiar with bi-weekly payroll, it means you are paying your employees every other week, or 26 times per year. Typically, running a bi-weekly payroll will cut your costs in half (depending on your method of payroll processing). This is a common payroll process seen in business because it is a less expensive means of paying your employees, but it is often enough to still please employees with frequency of payment.
A semi-monthly pay frequency is when you pay your employees twice monthly, usually either on the 1st and the 15th, or the 15th and the last day of the month. This frequency equates to paying your employees 24 times throughout the year. This frequency is more attractive to employers (but also potentially less attractive to employees) because it significantly lowers the cost of running payroll.
Running a monthly payroll is just as it states, paying your employees on a monthly basis, or 12 times throughout the year. This is by far one of the cheapest options to pay employees, but is not seen often unless the business consists of one or two employees.
Paying employees on a quarterly basis (4 times a year) is rare, but some still use this frequency. As mentioned with the monthly frequency, quarterly payroll is mostly limited to single employee businesses.
If you're interested in learning more about the different payroll options a cloud-based software can provide you, request a demo below and we'll be in touch.