HR Glossary for HR Professionals
Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.
What is a Pay Period?
A pay period is a recurring stretch of time that represents the days that an employee has worked and is compensated. Pay periods can be weekly, bi-weekly, and semi-monthly.
What is a Pay Schedule?
A pay schedule represents the pay period and the pay date. While a pay period establishes how often employees receive a paycheck (pay frequency), the number of pay periods in a year is determined by the pay schedule you choose.
Meanwhile, a worker’s pay date is the actual date that an employee is paid (paycheck received). Something to note is that the end of a pay period and the pay date may not always be on the same date.
Why Are Pay Periods Important?
Every business needs to determine which payroll schedule is right for their company. But it’s not that simple. Small businesses need to take into account the needs of the business and the needs of their employees before making their decision.
When employers weigh their options about which type of pay period to use for their team, it’s important to take into account the kinds of employees you have—and the cost, time, and resources they need to manage their payroll.
What Are the Different Kinds of Pay Periods?
Pros and cons for the four different kinds of pay periods include:
- Monthly: Occurs once a month on a specific recurring date
- Pros: Easy to manage benefit deductions; less time and low-cost
- Cons: Least-preferred by employees; difficult for new hires
- Semi-monthly: Occurs twice a month on two specific recurring dates
- Pros: Easy to manage benefits deductions; less time and lower costs; regularity
- Cons: Not good for hourly employees
- Bi-weekly: Occurs every two weeks on a specific day of the week
- Pros: Easy to calculate overtime for hourly employees
- Cons: Expensive accruals; difficult to manage benefit deductions
- Weekly: Occurs once a week on a specific day of the week
- Pros: Most favorable for hourly employees or employees with irregular schedules
Cons: High cost; high time commitment
Related Terms: Compensation