Here are some things worth considering when deciding how often you should pay your staff.
Not everyone pays monthly. Some organisations, depending on role, may pay in a variety of ways, with some staff salaried, others on an hourly rate, and still more paid on an ad hoc piecework basis. There’s nothing necessarily wrong with paying using a variety of schedules, but some payroll schedules fit some businesses better than others.
So here’s a quick simple guide to the considerations that come into play when considering how often to pay your staff:
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Set the date:
It’s better to get it right from the start: you can change how often you pay your staff, or the date you pay them, but it’s far easier for everyone if you set a schedule – whatever its pay frequency – from the outset and stick to it.
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What does your payroll schedule say about your staff?
If your business pays staff by the gig, or by the hour, there’s a fair chance that cashflow is going to be an issue for your people. Is setting up a weekly payroll, therefore, likely to suit them better than monthly pay?
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Benefits?
When the government introduced Universal Credit, the intention in making it a monthly-paid benefit was to make it easier to adjust to the typically monthly-paid world of work. If, therefore, a significant proportion of your staff are receiving benefits, your payroll schedule could take a similar view. Alternatively, your staff may welcome a weekly element to their income.
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Costs and admin:
Even if you outsource your payroll, weekly pay means a lot of compiling and checking timesheets – and the cost of your outsourced payroll may be more than with a monthly payroll (because there’s more work).
If you process payroll in house, there’s a real danger your processing team could be doing little else, week in, week out. Either way, the cost to the business of weekly payroll could be prohibitive.
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Cashflow:
The decision may be out of your hands. If your customers pay their invoices monthly you may have little option but to operate a monthly payroll yourself. If this is the case, though, be sure to explain to staff why an alternative pay schedule isn’t practical.
The simplest way of determining how often your staff would prefer to be paid is by asking them. If the response leaves you needing to change the date or frequency of your pay, you can find further guidance from the Gov.uk website.
And if you’d like to remove the hassle of payroll – whether you pay weekly or monthly – talk to us.