The most common payroll schedules are weekly, biweekly, semimonthly and monthly schedules. However, the payout changes for hourly employees based on the amount of time they work in each pay period, which can include overtime. Salaried employees receive a consistent payout and are not eligible for overtime. Commission and freelance workers often have flexible pay schedules, based on sales or the completion of individual projects.Continue Reading
Weekly, biweekly and semimonthly are the most common payroll schedules for hourly employees. A weekly schedule amounts to 52 pay periods a year and offers employees the security of always having another paycheck available within a few days. However, many employers choose not to use weekly schedules, as a higher pay frequency requires more work for payroll staff and increased fees for payroll vendors.
A semimonthly schedule amounts to 24 pay periods, or two checks per month. A biweekly schedule usually equals 26 pay periods, so employees receive three checks during two longer months every year. Biweekly and semimonthly schedules are typically the most cost-effective for employers and still offers regularity for hourly employees, who must budget for two weeks at a time. Employers often decide between biweekly and semimonthly schedules based on the ease of calculating pay changes, such as overtime, taxes and health insurance deductions.
A monthly schedule equals 12 paychecks a year, and it is the least expensive for employers. However, monthly pay is usually most inconvenient for employees, as it requires careful budgeting and may create financial difficulties when employees have emergency expenses.Learn more about Accounting