You choose a pay frequency before your first payroll run, whether you run payroll by hand or set it in SurePayroll® By Paychex. Because state payday rules can limit your options, check the requirements where your employees work.
Pay frequency is the rate: how many times a year you run payroll. A pay period is one span of work inside that rate, the days whose hours and earnings are totaled for a single regular paycheck. Payday and pay schedule often get used in place of both terms, but each one names something different.
You'll also see pay cycle. It's commonly used to mean the pay frequency or the pay schedule, not a single pay period.
The Bureau of Labor Statistics tracks four pay frequencies, and each one produces a set number of pay periods a year.
Biweekly is the most common. In February 2023, 43.0% of U.S. private establishments paid every two weeks, according to BLS survey data. Biweekly and semimonthly sound alike but run on different calendars: see biweekly payroll and semimonthly payroll. For counts by year, including the occasional 27th biweekly pay period, see How Many Pay Periods Are in a Year?
The Fair Labor Standards Act doesn't set a general pay frequency. It does require wages due under the law to be paid on the regular payday for the pay period covered, according to the Department of Labor's Handy Reference Guide to the Fair Labor Standards Act.
How often that regular payday comes around may be a matter of state law. Most states set a minimum pay frequency, and some set different minimums for different kinds of employees. Texas, for example, requires at least monthly or twice-monthly pay depending on the employee, according to the Department of Labor's state table.
Before you set a frequency, check the rule in each state where your employees work. The Department of Labor's State Payday Requirements table is the starting point, and your state labor department has the current rule.
Your pay frequency changes how federal income tax withholding is figured for each paycheck. Withholding is calculated based in part on the payroll period (the IRS term for pay period): the worksheets in Publication 15-T, Federal Income Tax Withholding Methods, use the number of pay periods you have per year. Changing the pay frequency can change the amount withheld from each regular paycheck. See payroll withholding for how withholding works.
Your federal tax deposit schedule is separate. Publication 15 (Circular E), Employer's Tax Guide, is direct about it: "The terms 'monthly schedule depositor' and 'semiweekly schedule depositor' don't refer to how often your business pays its employees or even how often you're required to make deposits." Deposit schedules are based on your employment tax liability during the applicable lookback period, so a business that pays biweekly can still be a monthly schedule depositor. You make deposits by electronic funds transfer, such as through the Electronic Federal Tax Payment System (EFTPS).
With SurePayroll, you choose your pay frequency during setup, whether that's weekly, biweekly, semimonthly or monthly. SurePayroll then calculates wages, deductions and tax withholding for each pay period.
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To weigh one schedule against another for your team, read Which Payroll Schedule Fits Your Small Business?
This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up to date