One effective way of improving productivity and keeping employees motivated to work is making sure they are paid on time. In that case, every business must have a pay schedule that dictates the frequency in which employees should be paid. Even if the company has the freedom of choosing its pay schedule, it must follow the state laws that dictate when paychecks should be expected. Remember, paying your employees frequently can drain you, while not paying them could make things hard for them and even demotivate them. Therefore, it is crucial to choose a payment schedule to ensure your payroll is processed on time.
One way of making sure payments is processed, and employees are compensated on time is by hiring payroll services Singapore. Before we look at the thing to consider when selecting a payroll schedule, let us dive into the four types of pay schedules.
Types of Pay Schedules
There are four main payment schedules accepted by the state. Here are their advantages and disadvantages.
- Weekly Payroll
This pay schedule is mostly applicable to hourly workers. However, the method is expensive. The reason why this method is expensive is that the companies processing the payroll charge the business every time the payroll is processed. Even though most hourly workers prefer this method, it is not preferable for small entities. If your own a construction or plumbing business, this may be the right method since most workers work hourly. It allows employees to calculate the overtime they have earned through the week. However, make sure you choose the best payroll company like BoardRoom Singapore.
- Bi-weekly Payroll
With this method, workers are paid two times a month. However, it is not always the case, considering that months differ. That means it will be inconvenient since employees receive their paychecks on different days every month. If your business has a mix of hourly and salaried employees, this method could work best for you. It gives the employees a solid knowledge of when each will receive their cheque. However, it is crucial to consult the payroll specialist to know if this is a great method.
- Semi-monthly Payroll
This method is almost similar to the bi-weekly method. However, instead of having different payment dates depending on the month, this method has two specific dates. Mostly, it is usually on the 1st and 15th of every month or the 15th and 30th. You can decide with your payroll service provider to pay on Friday or Monday if these days fall on the weekend. This may be the most convenient schedule for salaried employees because they don’t have overtime payments. It is also easy to know the right time to pay bills. On the other hand, this method may be inconvenient for hourly workers. It is not easy to understand overtime calculations with a semi-monthly pay schedule.
- Monthly Payroll
Even if this method is highly used, it may not be convenient for most businesses, especially the small ones. However, freelance employees or contractors can benefit from this method. Mostly, this schedule has various regulations. When it comes to accounting, this is a cheap route considering that payroll processing is done once a month. It is also easy to make deductions at the end of the month. However, this method makes budgeting hard for employees. It may pose a challenge when paying bills or managing the salary for a whole month before the next one arrives.
These are the four main pay schedules. It is crucial to evaluate the best payroll for your business. While at it, consider the following things.
- State Laws
The first and most crucial thing you should consider when choosing a payroll schedule is the state laws. Each state has laws dictating when businesses should pay their workers. You can pay the workers more often than the state allows. However, never pay them less often. You will be going against the law, and that means facing penalties.
- The Impact of Overtime
If you have overtime employees, check how their payment will affect your schedule. Overtime payments can be the hardest to process on a payroll. Therefore, before you choose a schedule, check how it will affect your overtime calculations. You must learn the rules and how much each worker should get for the overtime.
- Business Flexibility
Before choosing a pay schedule, consider your business flexibility. This is vital regardless of whether you are using in-house or outsourced payroll services. Therefore, understand how flexible your business can be when it comes to payments and choose the most suitable method.
- The Benefits and Downsides of Each
This may be an obvious point but worth mentioning. We have discussed the benefits and drawbacks of each payroll schedule. Go through each and consider your state laws. If you come across the most suitable option, try incorporating it into your business. It will be a good step to involve your payroll service provider in this decision.
- Your Business Needs
When processing payroll, there is a lot of paperwork involved. If your business does not have the resources and capability of processing the paperwork on a weekly basis, you may have to choose from the rest of the pay schedules. The important thing is selecting a schedule that your business can manage.
- Your Team Needs
When selecting a pay schedule, it is also recommended to keep the needs of your team as a priority. Remember, your employees play an integral role in the growth of your business. Therefore, putting their needs first means motivating them to work better towards the growth of your company. Get a payroll schedule that works for both the employees and your business.
If you still do not know the right pay schedule to choose for your business, BoardRoom Singapore can help you with this. We are a great company with ample knowledge of payroll services. We will help you choose the best schedule that works for you and your employees. Once we pick the schedule, make sure you stick with it. Shifting disrupts paydays and can seriously complicate your finances as well as your employees.