There are 3 main choices for monthly paydays: every 4 weeks, last day of the month and a specific date every month. Getting this wrong can negatively impact both your business and your employees so it’s important to choose a date that works for everyone.
Every 4 weeks
Comparing 4 week periods in terms of your business can be very useful as it eliminates the days of the week bias. So when comparing this month’s numbers to last, you may see significantly altered results due to a different number of weekends, especially in the service industry. Bringing your employee’s pay in line with this method can be helpful to make sure everyone is on the same system.
The flip side could be for your employees, as most utilities are billed monthly it can make their lives harder being paid at different times of the month. However, it will mean they are paid more often which they will almost certainly see as a plus.
Last day of the month & specific date in the month
Sending out one less paycheck per employee per year can save payroll costs so paying once a month 12 times vs 13 times every 4 weeks has that benefit. As mentioned earlier, employees may prefer their incomings and outgoings to be at the same time every month.
In terms of the last day of the month versus choosing a particular date, this mainly comes down to your preference. If you use suppliers and they need payment by a certain date each month then you should try and steer the payday to avoid everything happening at the same time. Just think of your poor financial department
Choosing your method
When you’re selecting your payday method to try to consider as many variables as possible. For instance, your industry needs your employees and any other mitigating factors.
If you need help with choosing or organising your payday and payroll, then get in touch with us.
Cintra Payroll provides tailored payroll services for each company it works with, ensuring that payments are accurate and are timely.