Many business owners feel that they can pay their employes “whenever” they want and that is true to a point. Business owners can pay their employees whenever they want as long as the “whenever” meets the laws of the state their business resides in.
As a business owner you probably feel “in control” when it comes to setting a payroll schedule for the people you hire. Certainly you have options, you can issue payroll on a:
- weekly
- bi-weekly {every other week}
- semi-monthly {twice a month, perhaps on the 1st and the 15th}
- or a monthly basis
While there is no federal laws that require how often you pay your employees, the payroll schedule you choose MUST conform to the requirements of the state that your business is located in.
Most states require that every employer has to pay all of the wages due to an employee on a regular payroll schedule, which is determined by you the business owner – BUT you must notify the employees of how frequently you intend to pay them. A “regular schedule” means that you must consistently pay your employees using whatever frequency you choose, in other words you can’t just randomly issue a payroll check.
Many states also tell a business owner how much of a “holdback” they can take. Meaning that if you decide your workweek starts on a Sunday and ends on a Saturday and that you will pay your employees on the Friday AFTER the end of the work week; you are holding back a week’s worth of pay.
A word of caution – a business can get into trouble if it doesn’t pay it’s employees as often as the law requires – and I’m sure you don’t want or need that additional headache! Believe it or not, but each state has their own set of rules and regulations {imagine that!}, in some states the rules are different depending upon the employees occupation. In other words, setting a payroll schedule that is realistic for your company AND that conforms to state requirements can be a mess!
The U.S. Department of Labor provides a fairly detailed overview of employee payroll schedules by state, you can find State Payday Requirements here, the information provided is ONLY an overview of general information – you should most definitely contact your state department of labor for all of the details!
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A reader asked the following question regarding paying employees using different frequencies:
We are new to QuickBooks payroll and would like to set up different pay frequencies for our employees, as follows:
- Company officers – monthly salary
- Clerical staff – hourly basis, bi-weekly
- Field Workers – hourly basis, weekly
How do we accomplish this when using QuickBooks?
_______________________________________________________
Answer:
Yes, you can accomplish this when using QuickBooks Basic, Enhanced, or Assisted Payroll.
QuickBooks allows you to create a “Pay Frequency” and a “Payroll Schedule” to meet your various payroll needs.
Begin by going to the QuickBooks Employee Center and clicking on the Employees tab.
Pick an employee and choose the Edit Employee button, switch to the Payroll & Compensation Info tab. In the upper right corn you will see a Payroll Schedule option, this is where you will create a new Payroll Schedule and corresponding Pay Frequency.
From the Payroll Schedule dropdown menu choose Add New, below is the setup for a bi-weekly payroll schedule:
There are two very critical dates that you must enter when you create a new Payroll Schedule, they are:
- What is the pay period end date? This date should be the date the the first bi-weekly payroll will end on.
- What date should appear on paychecks for this pay period? This date should be the date that the first bi-weekly paycheck will be run.
The screenshot above indicates the following information:
The bi-weekly pay period will end on Saturday July 10, 2010 and we will process payroll checks (date of checks) on Wednesday July 17, 2010.
Once you have created your Payroll Frequency/Schedule you will then edit each employee’s record, going to the Payroll & Compensation Info tab as select the appropriate frequency (Weekly, Bi-Weekly, or Monthly).
When you are ready to actually pay your employees, go to the Employee Center and click on the Payroll tab, each of your Payroll Frequencies will be displayed, click on the appropriate frequency (Weekly, Bi-Weekly, or Monthly) and click the Start Scheduled Payroll button.
We hope you have found this QuickBooks Payroll Tip to be helpful, if so, please feel free to leave us a comment below.
