Payroll Play 2/10: How to change Payroll Frequency for your business?
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Payroll Play 2/10: How to change Payroll Frequency for your business?

Before changing payroll frequency, several factors should be weighed. In this article, I’ll walk you through them. Let's dive in.


  • You’d like to improve your cash flow projections.
  • You might want to tailor the pay cycle for hourly vs. salary employees.


1. Check with Local Laws

  • Ensure compliance with both federal and state laws.

2. Consider Company Cash Flow

  • Assess your business's finances.
  • Ensure you can meet payroll obligations under the new frequency.
  • Evaluate cash flow projections to avoid any financial strain.

3. Choose Your Payroll Cycle

  • Weekly payroll

It contributes to higher staff satisfaction, but processing payroll weekly can be more time-consuming and costly for employers if you don’t have an automated system in place that can facilitate weekly payrolls without adding extra workforce hrs.

NB: To not go wrong in your calculations for hourly employees, try an hour converter for payroll like this or this.

  • Bi-weekly payroll

When you set payroll every two weeks, it’s more likely to be a win-win situation. Your employees gain frequent pay and you maintain administrative efficiency.

  • Semi-Monthly Payroll

It is often preferred for salaried employees. A bi-monthly pay period may lead to slightly lower annual payroll processing costs compared to bi-weekly pay due to fewer pay periods.

  • Semi-monthly vs bi-weekly payroll

The bi-monthly payroll is better since you have two fewer payrolls per year to prepare.

  • Monthly payroll

It’s the least preferred option for employees due to longer wait times between paydays, but it offers simplicity and cost-effectiveness for employers.

  • Earned Wage Access

Employers should carefully evaluate EWA providers as well as scheduling and payroll software to ensure compliance with applicable wage laws and regulations.

4. Update Pay and Deduction Amounts

Update tax and deduction amounts according to the new payroll frequency to maintain consistency and accuracy.

5. Align the PTO Plan

If necessary, ensure your paid time off (PTO) plan aligns seamlessly with the new payroll schedule to avoid any discrepancies.

6. Inform Employees

Communicate the new payroll schedule clearly to all employees in advance to allow them to adjust it with personal budgets.

7. Update Contract Templates

Revise and update contract templates to reflect the new payroll schedule.

Expected Results

  • Improved cash flow projections.
  • Increasing payout frequency worsens cash flow but boosts employee satisfaction.
  • Or conversely, reducing frequency results in more company cash but less satisfied employees.
  • Tailored pay cycles meet individual needs and preferences.
  • Enhanced compliance with payroll regulations mitigates legal risks.

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