Many provinces allow monthly payroll, but others require you to pay your employees more frequently. One of the biggest potential pitfalls of running payroll just once a month is compliance with provincial laws. Because of that, this payroll schedule tends to work better for salaried employees. However, paying hourly employees semimonthly can be confusing as the pay period can end in the middle of the week, and that makes it hard to calculate overtime accurately.
When you switch to semimonthly paycheques, you need to make that amount $108.33.įor hourly employees, you should simply continue to pay them by the hour, but you may need to convert some deductions as explained above. For instance, if your employee currently pays $100 per biweekly paycheque for private health insurance, that equates to $2,600 per year. You may also calculate regular deductions in the same way. When divided by 26, this results in semimonthly payments of $2,166.67. For example, if your employee’s biweekly paycheques are $2,000, he or she earns $52,000. Alternatively, start with the annual salary and divide by 24. To convert the new payment amount for salaried employees, multiply their biweekly salary by 26 and divide the result by 24. As a result, with a biweekly schedule, employees receive 26 paycheques per year, but with a semimonthly schedule, they receive 24. With biweekly pay periods, you pay employees every two weeks, but with semimonthly periods, you pay employees twice a month. On a monthly schedule, the cutoff for turning in pay may vary from one month to the next depending on when the end of the month falls. The due date remains the same every week since you run payroll on the same day each week. Weekly pay periods also make it easier to know when time cards or time reports are due. With monthly pay periods, the first and last week of the month are often partial weeks, which can complicate your calculations. Since the pay period coincides with the work week, it’s easy to calculate any extra pay. On your end, calculating overtime is a straightforward process if you have hourly employees on staff. If you offer weekly payroll, you can expect high employee satisfaction.
For example, if an employee works 65 hours one week and only 25 hours the next week, it’s helpful to have that extra overtime pay before heading into the lighter schedule week. That can be especially helpful if the weekly schedule varies significantly. When an hourly employee works overtime, they get paid for those extra hours sooner rather than having to wait two weeks or even until the end of the month to get the extra money. It keeps a steady flow of money coming into their bank accounts, which can make it easier to budget household finances. Many employees appreciate getting paid every week.
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