Mastering the payroll cycle is important for employers aiming to maintain a smooth and efficient payroll system. For any growing business, refining and optimizing the payroll cycle is not just an option, it is essential for success.
A payroll cycle refers to the regular intervals at which employees are paid, and it can vary depending on the employer’s preferences and industry standards. From weekly to monthly cycles, each type has its own implications for both payroll processing and personal budgeting.
In this guide, Aniday breaks down the different types of payroll cycles and how they impact both employers and employees.
What Is A Payroll Cycle?
A payroll cycle is the frequency at which the employer pays its employees for the work they do based on a recurring schedule or as per the terms. A pay period is the time for one paycheck and one payroll cycle.
Companies should follow a specific pay cycle to ensure timely payments, fair compensation, and ideal reporting. The human resources department primarily maintains the payroll cycle through an in-house method, accounting department, or third-party provider.
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1. Weekly Pay Cycle
In a weekly pay cycle, employees are paid their paychecks once a week. Generally, employees are paid every Friday in this type of pay cycle. So, there will be 52 total payments per year.
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Here are some key features of the weekly pay cycle:
Suitable for employees who work overtime or have irregular schedules.
Expensive pay cycle method due to weekly payments.
It is time-consuming for HR or administrative teams.
2. Bi-Weekly Pay Cycle
In a Bi-weekly pay cycle, the employers pay once every two weeks. Hence, the payments are made at the end of the second week of Friday. In this case, employers would pay 26 times a year in this type of pay cycle. Here are some key features of the bi-weekly pay cycle:
A stable payment method for employees.
Effective to calculate tax and deductions calculations.
Complex in some situations, such as overtime and commission calculations, as to who is paid hourly.
Monthly Pay Cycle
In a monthly pay cycle, employees are paid once a month. Hence, the payments are made on the last day of every month. A monthly pay cycle is an easy pay option for employees as they make payments only 12 times yearly. Here are some key features of the monthly pay cycle:
An easy and effective method for the payroll team to handle payments.
Ability to effectively calculate taxes and deductions with no complications.
Not an expensive payment method.
This may complicate the process of managing the expenses.
Employees have to wait longer to obtain their payments.
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What Is The Most Common Payroll Cycle?
Now you know all the payroll cycle types, but the biweekly method is the most common one. This method is mainly used in the United States, but it also depends on the country and the industry.
For example, countries in the Middle East, Europe, Africa, Asia Pacific, and more commonly use a monthly payroll cycle.
What Are The Steps Of A Payroll Cycle?
When managing the payroll cycle, employers must know and handle the ideal steps systematically. Aniday offers a step-by-step guide to streamline the payroll process and make it as seamless as possible:
Update the employee’s information: Collect all the required information, including employee identification, government information, personal information, and more, and update it in your payroll system.
Enter the hours worked: The HR team should enter the employee’s hours worked.
Calculate the gross pay: The gross pay needs to be calculated based on the hourly payment or agreed payment rates, including benefits such as bonuses and commissions.
Tax and other deductions: The HR team should include the payroll deductions based on the employer’s and government policies.
Calculate the net income: Net income is simply what remains after subtracting all deductions from the gross pay.
Make payments: Once the pay is finalized, you can distribute it to employees either through paper checks or by making direct deposits into their bank accounts.
How To Choose A Payroll Cycle
When deciding a payroll cycle for a company, it
The Ultimate Guide To Employee Benefits In 2024
As the world of work continues to evolve, so do the expectations around employee benefits. In 2024, staying ahead means understanding not just the basics, but the latest trends and innovations that can set your organization apart.
The top three sought-after employee benefits are health-related benefits, paid time off, and dental insurance. However, there are many more employee benefits, and employers must know how to tackle them effectively in the employee benefits package.
In this guide, Aniday walks you through the important employee benefits, and how to design and measure the effectiveness of these packages.
What Are Employee Benefits?
Employee benefits are any type of compensation given to employees other than the basic wage. Some employee benefits are compulsory for public-sector companies, while private-sector businesses can choose the ideal benefits they want to offer based on the country’s rules and regulations.
These employee benefits are a key strategy for retaining talented employees, ensuring their well-being, and providing job satisfaction.
According to Teamstage statistics, providing health-related benefits to employees will continue to grow in the upcoming years.
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What Are The Key Employee Benefits Examples?
Employers offer many employee benefits but may differ based on a public or private sector company. However, here are c level contact data some key employee benefits given by the employers that Aniday has collected:
1. Health-Related Employee Benefits
Health-related employee benefits cover the employee’s health. Employers providing these benefits ensure the employee’s health is fit. Here are some health-related employee benefits:
Prescription drug coverage
Wellness programs
Employee assistance programs (EAPs)
Medical insurance
Dental insurance
Vision insurance
Confidential counseling
Employers can also support health and wellness programs to enhance the overall well-being of their employees. Here are some health and wellness programs employers can consider:
Regular health check-ups
Gym memberships
Mental health support
Most employers enroll in health insurance plans to cover the essential health-related factors for employees. The following are adb directory the key types of health insurance plans offered:
Preferred provider organizations (PPOs): Under PPOs, employees can consult any doctor without obtaining any referral.
Health maintenance organizations (HMOs): Under HMOs, employees must pick a primary care physician whom they can always consult.
High-deductible health plans (HDHPs): Under HDHP, there are high deductibles, but they are offered at lower premiums.
91% of Generation Z and 78% of millennials also believe that every company should implement a mental health insurance policy.
2. Paid Time Off Benefits
Paid time off is a highly valued benefit, allowing employees to recharge and enjoy their time off without any worries. Also, paid time off includes the following:
Family medical leave
Holidays
Parental leave
Personal time
Sick time
Vacation
Volunteer time
3. Financial Employee Benefits
Financial benefits are integral for employees, offering long-term support and security that they value. Here are critical financial employee benefits provided by employers:
Compensation package
Retirement benefits
Financial coverage in the event of a death or unable to work due to serious illness
Financial planning assistance
Life insurance
Long and short-term disability insurance
Stock options or company equity
Providing the ability to purchase stocks or being a part of equity compensation attracts many employees. Here are two main types of stock options given to employers:
Employee Stock Option Plans (ESOPs): ESOPs allow employees to purchase company stocks at a future date for a specific price.
Restricted Stock Units (RSUs): RSUs allow employees to purchase stocks according to a vesting schedule.
4. Retirement And Pension Plans
If an employer contributes to retirement and pension funds, it helps secure the employee’s future. Since this is one of the primary concerns, employers will also achieve the trust and loyalty of the employees by implementing this strategy.
5. Work-Life Balance Benefits
Employers should provide a work-life balance to ensure every employee’s well-being. Many employees suffer from stress, loneliness, burnout, and other mental health issues.
Employers should act proactively by offering work-life balance benefits. When employers provide them, it helps the employees enhance their efficiency and overall well-being. Here are some work-life balance benefits Aniday suggested employers should offer:
Commuter benefits
Flexible work schedules
Recognition awards
Remote work arrangements
Sabbaticals
Tuition reimbursement
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How To Make An Strategic Employee Benefits Package?
Even though employers know all the employee benefit options
