How Often Should You Run Payroll? Weekly, Every Two Weeks, Twice a Month or Monthly

What a pay period and a pay date are

A pay period is the stretch of time your team worked to earn the pay. A pay date is the day the money actually goes out. The two are almost never the same day. Your team works the hours first. Then the pay follows on the pay date.

This gap matters for the books. The work happens in one period. The cash leaves the bank on the pay date. Ask your CPA how pay should be recorded. We keep the books consistent with that. If you record it on the last day worked instead, the books and the bank stop agreeing.

A pay period can be seven days, fourteen days, half a month, or a full month. The pay date is usually a few days after the period ends. That gap gives whoever runs the payroll time to check the hours and fix mistakes before the money goes out.

The four common schedules

There are four schedules most small businesses use. Each one sets how often the pay runs and how many pay dates land in a year.

Weekly means a pay run every week. The team gets paid every seven days. This works well for hourly crews whose hours change a lot. It gives them cash fast. It also means the most pay runs of any schedule, so the most work for whoever runs the payroll.

Every two weeks means a pay run every fourteen days. The team gets paid every other week. This is the most common schedule for small businesses with hourly workers. It is a good middle ground. The team waits a short time for pay, and the pay runs do not pile up too fast.

Twice a month means two pay dates each month. These often fall on the fifteenth and the last day of the month. The team gets paid two times a month, no matter how many days are in the month. This works well for salaried staff whose pay stays the same. It is easy to plan around because the dates are fixed.

Monthly means one pay date each month. The team gets paid once a month. This is the least work for whoever runs the payroll. It is also the longest wait for the team. It works best for owners and a small number of salaried staff who do not need cash every week.

Here is how the four compare.

How the schedule changes your cash flow and your books

The schedule you pick changes two things. It changes how often cash leaves the bank. It changes how often the books move.

A weekly schedule pulls cash out of the bank every week. That keeps the team happy, but it asks the bank account to be ready every seven days. A monthly schedule pulls cash out once. That is easier on the person running the payroll, but the team waits longer for their pay.

The books move with each pay run. Every run adds a wage line, takes out the right amounts, and sends the filings. The more runs you have, the more lines the books hold for the month. When the cash leaves the bank, the books should show it on the same day so the two agree after every pay date.

There is one more wrinkle with the every two weeks schedule. Most months have two pay dates. Twice a year, a month has three. That third pay date changes the cash you need that month and the wage total in the books. Plan for it before it surprises you.

Questions to ask before you pick a schedule

Before you pick a schedule, ask a few questions. The answers point you to the right one.

Are your people hourly or salaried? Hourly workers often do better with weekly or every two weeks, because their hours change and they need cash on a short cycle. Salaried staff can wait longer, so twice a month or monthly can work.

How is your cash on hand? A weekly schedule asks the bank to be ready every seven days. If cash comes in slowly, a longer cycle gives it time to build up. Match the pay dates to the days your customers tend to pay you.

Who reviews the hours? Every pay run needs someone to check the hours, fix mistakes, and approve the pay. Weekly means that review happens every week. Monthly means it happens once. Pick a schedule your reviewer can keep up with.

Here is a short checklist.

• Hourly or salary: hourly leans toward weekly or every two weeks.
• Cash on hand: match pay dates to the days cash comes in.
• Who reviews the hours: pick a cycle the reviewer can keep up with.
• What the team expects: some trades expect weekly pay.

The schedule is your call. You can read more on our payroll page.

How your books tie out after every pay run

After every pay run, the books should tie out. That means the wage line, the amounts taken out, the filings, and the bank all agree. When they agree, the month closes clean.

The wage goes in the right line. What came out goes where it belongs. The filings get recorded. When the cash leaves the bank, the books show it on the same day. This is the clean tie to your books. Payroll does not sit in a separate place. It lives in the same books as everything else. When the month closes, the payroll lines match the pay records and the bank. Your CPA starts with numbers that already agree.

We are QuickBooks Online Accountants, or QBOA, and we work in QuickBooks Online and Xero. We keep the payroll tied to the books in the same software your books live in.

Made up example for teaching

A small cleaning company with four hourly workers

A small cleaning company has four hourly workers. Their hours change every week because the jobs change. The owner picks a weekly schedule so the crew gets paid fast and the hours stay fresh in everyone's mind.

Every Friday, the owner sends the hours for the week to their payroll provider. The provider runs the pay, takes out the right amounts, and sends the pay checks. The filings go out on time. On Friday, the cash leaves the bank.

We keep the books. The books show a wage line for each run. What came out of the pay goes where it belongs. The filings get recorded. When the month closes, the payroll lines match the pay records and the bank. The owner can see the true labor cost for the month because every run is already tied out.

If the owner had picked monthly, the crew would wait four weeks for pay. The hours would be harder to track. The books would move once a month instead of every week. The weekly schedule fits this crew because their hours change and they need cash on a short cycle.

This is a made up example for teaching. Your numbers and your schedule are your own. Confirm the rules that apply to you with your payroll provider, your CPA, or the agency.

Common questions

Which payroll schedule is best? The best schedule is the one your cash flow can handle and your team can count on. Hourly crews often do well with weekly or every two weeks. Salaried staff can use twice a month or monthly.

How often should I run payroll if my workers are hourly? Most hourly crews do well with weekly or every two weeks. Their hours change, and a short cycle keeps the hours fresh and the cash steady. Pick the one your bank and your reviewer can keep up with.

Does a monthly schedule save work? A monthly schedule has the fewest pay runs, so the least review work. It also means the longest wait for your team. It works best for owners and a small number of salaried staff.

Do you pick the schedule for me? The schedule is your call. We offer monthly payroll with pay runs every pay period, pay checks, filings and a clean tie to your books. You can reach us on our contact page if you want a team that keeps your payroll tied to your books.