It’s all about money when it comes to payday. And why not?! After all, your dedicated employees are doing the hard work to add value to your company. They deserve to be paid on time so that they can get their ends meet.
Most firms are clear with the thought of how frequently they’ll be paying their employees. In case if your business is newly established or if you’re resetting the payroll system, you may need to figure it out again. Though paystub maker will help you get sorted, you have to consider certain things to determine the best-fitting pay cycle for your organization.
We’ll go with the basics first.
What is a pay cycle?
The frequency at which an employee is paid at work is known as a pay cycle. In other words, it is something that determines how often you release pay to employees & how many times your payroll system is up for calculating the paystubs.
You may also refer to a pay cycle as a pay schedule wherein the pay period and payday is at the core. Pay period refers to the duration for which the employee has worked & is being paid in the paycheck. On the other hand, payday is the day when the employer issues a paycheck or paystub along with releasing the payment.
A pay cycle holds equal importance for employees as well as employers. For employers, it helps them to manage finances and track expenses. Hence, it is better if you opt for acheck stub maker to ensure accuracy.
5 Common Types of Pay Cycles
When not mandated by law, employers enjoy selecting pay cycles as they desire. Here are the common pay schedules preferred by firms:
Workers are paid every day here. This pay cycle is for ground-level workers who are not financially sound and those who cannot wait for monthly payday for their bread. It is undoubtedly convenient for employees, but employers may have to face additional payroll costs because they have to calculate hours & pay daily accordingly.
Weekly pay is mostly preferred for freelancers or contractors with irregular work schedules. Employers choose to pay weekly to clear short amounts in case if they don’t require services the next week.
This gets to be a common pay cycle for most firms that have fixed pay cycles. They dispatch payrolls every two weeks, usually on Fridays. As the year has 52 weeks, every month does not have 4 weeks. Hence, employees get benefitted here by receiving some bonus pay periods. Businesses may suffer from loss if they have a pre-planned bi-weekly payment schedule.
The semi-monthly pay cycle is often confused with bi-weekly, but they’re different. In this case, paychecks are distributed twice every month. For instance, employers create a pay stub [Ma1] on the 1st and 15th of every month or 15th and last day of each month. It makes for 24 payments per year. It works best for salaried employees.
This may not even need to be explained, right? With a total of 12 pay periods per year, the monthly pay cycle gets employers sorted with less headache of producing paychecks repeatedly. Employers have a specific day decided to release payments for all employees every month.
All set to proceed with your pay cycle? Try Check Stub Maker now!
What is the first thought that strikes your mind after learning these pay cycles? Did you find anything suitable for your employees yet? If yes, we have a free paystub generator for you as well as a provision to make the W2 Form online easily. Would you like to try it?