Payroll Period and Pay Date Best Practices

payroll period

Here are the payroll period and pay date best practices for all companies. The payroll period is the time the employee works. The pay date is when the employee receives their funds, whether it is a check or direct deposit. With technology, almost all employees now receive direct deposits and not checks. One of the first things an employee seeks to understand when they get hired is how the companies payroll period runs. Knowing the timeframe helps the employee to follow the next payroll period they will receive their wages.


Pay Period vs Pay Date

The payroll period is a recurring length over which an employee’s time is recorded and paid. As a business manager, we’ve come across many different types of payroll periods, and when ask what made you select it, they have no logical answer. A pay date or check date follows the payroll period. Since most of us get a direct deposit these days, we’ll refer to it as a payment date since the payroll period can be a week or bi-weekly. Bi-weekly payroll tends to be less expensive than weekly when dealing with a payroll company.


Best Practices

I want to recommend best practices for the payroll period. No matter when a company starts, their payroll should be Sunday to Saturday. Then the pay date would be the following Friday. Whether you are conducting a weekly or bi-weekly payroll, this formula is workable and easily understood by everyone. Choosing this payroll period and pay date format will allow the company to process payroll without rushing, fix time card errors, and provide some breathing room to get payroll funds together. For example, the HR department can review everyone’s time card, fix mistakes, and understand how much funds are needed to cover the payroll. By Tuesday or the latest Wednesday, you must process your payroll for your team to be paid on Friday, depending on your payroll company’s need.


Even if your business is not open on a Sunday or Saturday, it’s best to adopt the suggested payroll periods. It gives the HR department an edge to start the process that can be overwhelming to tackle the process while leaving enough time to capture everyone’s time card without hardship. Remember when setting up your payroll, make your payroll period Sunday to Saturday with the following Friday’s pay date. Adopting the mentioned guidelines will ensure that it will help with the transition if you decide to move your payroll to a different payroll company.


About the Author

Jacquéline Edwards is a Business Manager with over twenty years of experience for Business Pipeline, Inc, a business management firm designed to assist business owners with bookkeeping and business management needs.