Running payroll takes time and energy, especially for business owners who already juggle a lot. As your team grows, keeping up with taxes, deductions, and benefits only adds more to your plate. Employers need schedules they can manage, and employees want consistency they can count on. Understanding the different types of pay periods in a year helps you balance both sides—keeping your team happy and your operations on track.
In this guide, we’ll break down what a pay period is, explain the different types, and weigh the pros and cons of each.
What’s a pay period?
A pay period is the set timeframe a company uses to track work and issue paychecks. It determines factors such as:
- Payment schedules
- The number of paychecks employees receive annually
- The deductions from each paycheck for employee benefits and payroll taxes
Each period has a start and end date, and once one ends, the next immediately begins. The schedule should stay consistent, so employees know exactly when to expect their wages. Employers can choose different cycles, such as weekly, biweekly, and semi-monthly. And sometimes, they use separate schedules for salaried staff and hourly workers.
What are the types of pay periods?
Companies can choose from several different pay period options, each with its own rhythm and impact on payroll. The right choice depends on your business needs and how you want to balance costs, compliance, and employee expectations. Here are the most common types:
- Weekly: Employees are paid each week.
- Biweekly: Employees are paid every two weeks.
- Semi-monthly: Employees are paid twice a month.
- Monthly: Employees receive one paycheck at the end of each month.
Pay periods also shape how payroll runs behind the scenes. The schedule you set can simplify or complicate everyday operations, especially when it comes to:
- Enhancing payroll accuracy
- Coordinating payments for international employees
- Streamlining payroll services and the payroll system
- Balancing cash flow management
- Managing retroactive pay and back pay adjustments
- Ensuring timely compliance with tax obligations
How many pay periods are in a year?
Your pay period keeps the business on budget and lets employees know exactly when payday’s coming. Here’s how the main schedules look throughout the year:
- Weekly: You run payroll once a week, which means 52 checks in an average year. In some leap years, that number jumps to 53.
- Biweekly: Paying every two weeks results in 26 checks a year. Occasionally, a leap year pushes it to 27.
- Semi-monthly: Employees receive two checks a month—often on the 15th and last day—for 24 pay periods annually.
- Monthly: You issue one paycheck each month, totaling 12 in a year.
Pros and cons of each pay period type
Some pay types offer predictability, while others keep payroll costs lower or make cash flow easier to manage. To help you weigh your options, let’s dive into the pros and cons of each one.
Weekly pay
Pros:
- Employees get more frequent paychecks, which can help with budgeting and managing expenses.
- Weekly paydays can increase employee satisfaction and morale.
- You can track and manage overtime pay more easily.
Cons:
- Frequent payroll processing means more work and costs for employers with higher processing fees.
- Employers must manage cash flow carefully to ensure funds are available for weekly payroll runs.
- Employers must account for variable pay periods depending on the year.
Biweekly pay
Pros:
- Employees still receive paychecks frequently enough to manage expenses and plan their finances.
- Employers enjoy less frequent payroll processing compared to weekly payroll, reducing the administrative burden.
Cons:
- Overtime calculations can be more complex after a 14-day period.
- Employers must manage cash flow to accommodate payroll every two weeks, adding to administrative costs.
- Some years may have an extra pay period (27 instead of 26), complicating overtime and annual budget calculation.
Semi-monthly pay
Pros:
- Employees get paid on set dates, which aligns nicely with recurring expenses, such as rent and bills.
- Payment is less frequent than weekly or biweekly payroll, reducing the administrative burden.
- Calculating taxes and deductions is easier when using consistent dates each month (usually the 15th and last day of the month).
Cons:
- Pay periods are not always the same length, which can complicate payroll processing.
- Employees might find it harder to budget daily expenses due to varying payroll period lengths.
- Time tracking and overtime calculations can be more complex due to the non-standard periods—especially without a user-friendly payroll software system.
Monthly pay
Pros:
- Less frequent payroll processing cycles reduce administrative costs and workload.
- Employers can more easily manage cash flow and financial planning.
Cons:
- Employees must budget each month carefully, as they receive only one paycheck.
- Employees may have to wait for overtime payments.
3 steps to choosing the best payroll type for your organization
Choosing the right payroll process for your company starts with breaking it into manageable pieces. That way, you set a schedule that supports employees and keeps costs under control. Here are three steps to get started.
1. Meeting employee preferences
Some workers prefer frequent paychecks to stay on top of weekly expenses, while others are comfortable with semi-monthly or monthly schedules that feel more predictable. If you’re unsure which approach best suits your team, ask for feedback. Involving your team in the decision shows that you value their input and can go a long way in building trust and satisfaction.
2. Following legal requirements
Payroll rules differ across states and countries, and failing to comply can trigger fines, audits, and disputes. Some regions mandate at least semi-monthly pay, while others give you more flexibility as long as payments are consistent. To stay compliant, keep up with local labor laws and maintain clear documentation of your payroll practices. If you employ people in multiple locations, be prepared to follow several sets of rules at once to safeguard both your business and your employees.
3. Managing payroll costs and workload
Running payroll requires a significant amount of time and resources. Weekly cycles push HR and finance teams to constantly review timesheets, approve hours, and process deductions, which can stretch limited resources. A wider gap between paydays can ease the workload and lower costs, but it may also limit flexibility for employees. The best approach is one that keeps the process accurate while preserving both efficiency and employee satisfaction.
Finding the right pay period for your business
Choosing a payroll schedule has a big impact on your organization because it helps stay compliant, control costs, and manage cash flow. By weighing your team’s preferences and following local laws, you can land on a schedule that keeps both sides in sync.
If you’re looking for a way to simplify payroll across borders, Oyster can help. With fast, compliant payroll in 30+ countries, Oyster makes it easy to pay your global team on time, every time.
FAQs
How do you calculate the number of pay periods in a year?
You can figure out the number of pay periods by looking at how often you run payroll within a calendar year. Each schedule breaks down like this:
- Weekly: 52 pay periods (53 in some years)
- Biweekly: 26 pay periods (27 in some years)
- Semi-monthly: 24 pay periods
- Monthly: 12 pay periods
The main difference comes down to whether your schedule follows weeks on the calendar or fixed dates. Weekly and biweekly schedules sometimes result in an “extra” paycheck in certain years, whereas semimonthly and monthly schedules remain consistent.
Can companies adjust pay periods, and are there any associated legal implications?
Yes, you can adjust pay periods, but you need to handle the change carefully. Employers must give employees notice, update payroll policies, and make sure the new schedule follows local labor laws. Some states or countries require at least semi-monthly pay, while others allow more flexibility. If you operate in multiple locations, you’ll need to meet each region’s rules.
Is weekly pay better?
It depends on what you value. Weekly pay satisfies employees by giving them faster access to their money, which many appreciate for budgeting. But for employers, it means more payroll runs and higher admin costs. There’s no one “better”—just what works best for your team and business.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
