In this podcast episode, we talk about optimizing the use of payroll cycles, and point out a legal issue that can interfere with one of the more common payroll cycles. Key points are:
A payroll cycle is the length of time between payrolls, such as weekly, once every two weeks, semi-monthly, and monthly.
Less total annual accounting effort is required to prepare the longer payroll cycles, since there are fewer of them.
Every two weeks or semi-monthly are generally the most tolerable for employees.
A two-week payroll cycle gives employees two paychecks per month, plus two additional checks over the course of a year.
The semi-monthly payroll can cause a problem, because (depending on the dates) it may sometimes require employees to wait too many days from when a pay period ends to when paychecks are issued. Therefore, a two-week cycle is the best combination of processing efficiency and compliance with the law.