Every decision counts…..and when it comes to running a business there are tons! An important payroll question is when and how to pay employees. Commonly employers will pay bi-weekly, meaning every two weeks or semi-monthly, which is different – employees are paid on predetermined dates two times every month. Let’s take a look at the differences.

When employees are paid on a bi-weekly system they receive 26 paychecks per year. On a semi-monthly system they receive 24; however, bi-weekly checks are smaller than semi-monthly checks, as they are a smaller portion of the annual income of the employee. Waiting time on semi-monthly checks may present a longer waiting time for staff members as well.

Some employees may like a bi-weekly plan. Others may prefer semi-monthly. A bi-weekly check can help employees manage funds and finances. Except for holidays they can expect their checks on the same day every two weeks.

Employers should understand that the government (federal Fair Labor Standards Act) requires that nonexempt hourly employees, who are eligible for overtime (working more than 40 hours per week) receive a salary of 1.5 times their hourly rate. Because a workweek is based on a week long period, it is easier for the employer to calculate overtime payments using the weekly method when calculating overtime.

State law dictates the minimum frequency that employees must be paid. Laws about payment can vary from state to state. An advantage of bi-weekly payroll is that operating or planning in several states is easier in terms of payroll compliance, helping avoid the expense of changing payroll processes to conform to each state.

When a business manager thinks of the factors that need to be considered with each business task and operation, it is easy to see why many businesses and managers decide to hire an outside business management firm to insure proper compliance with proper business procedures and law.

Take the head ache out of running your business. Call the experts at DirectPay Payroll at 704-921-2730 or check out their website at www.directpaypayroll.com. Don’t let the burden of managing day-to-day operations take away from valuable business hours that could be spent serving clients or developing sales leads. Call DirectPay today!