Pay period

What is a pay period?

A pay period is the recurring schedule on which an employee’s wages are calculated and paid. It defines the start and end dates of the work time for which an employee receives compensation.

Common pay periods include weekly, biweekly, semimonthly, and monthly. The choice of pay period affects payroll processing, tax withholdings, and employee cash flow.

How does a pay period work?

The pay period determines how often employees receive their paychecks and what work hours are included in each payment. For example, if a company uses a biweekly pay period, employees are paid every two weeks for work completed during that time frame.

Some important considerations:

• Pay date vs. pay period: The pay date is when employees receive payment; the pay period is the timeframe that payment covers.
  
  
• Payroll lag: Employers may process payroll a few days after the pay period ends, leading to a delay before payment.
  
  
• Overtime and hours worked are typically calculated based on the pay period.
  
  

Why do companies use defined pay periods?

Pay periods bring structure to payroll and help companies:

• Ensure consistent and timely payments.
  
  
• Accurately track employee hours and benefits.
  
  
• Stay compliant with labor laws and tax obligations.
  
  
• Align payroll processes with accounting and budgeting needs.
  
  

Examples of pay period structures

• A retail company pays its hourly employees every week, with paychecks issued every Friday for the previous week’s work.
  
  
• A tech startup pays salaried employees on the 15th and last day of each month.
  
  
• A global firm aligns pay periods differently per country to match local labor laws.
  
  

Pay period vs. payroll cycle vs. pay date

The terms pay period, payroll cycle, and pay dates are often used together, but they refer to different parts of the payroll process. Here’s how each differs: 

• Pay period: the timeframe employees work, or the specific span of time during which employees work and earn wages.
  
  
• Payroll cycle: The full process of collecting hours, calculating wages, and issuing payments. It’s the end-to-end process a company follows to calculate and distribute employee wages.
  
  
• Pay date: The actual day employees are paid.

Things to consider with pay periods

When choosing or managing a pay period, employers should:

• Understand legal requirements in each country or region.
  
  
• Communicate the schedule clearly in employment contracts.
  
  
• Coordinate with payroll providers or your internal payroll team to ensure timely processing.
  
  
• Consider employee preferences and cash flow needs.
  
  

How Remote can help

Running payroll across multiple countries means navigating different pay period rules, tax deadlines, and local expectations. Remote simplifies global payroll by automating compliance, payment schedules, and tax reporting, so you can consistently pay your team on time, anywhere. 

Discover how Remote can help simplify your global HR today.