How Often Should I Pay My Employees?
Each state has its own requirements on how often payroll has to be paid. Most states require that payroll be paid at least twice a month. Some even require weekly payroll for laborers or non-exempt employees.
QBO recommends that payroll be paid twice a month or semi monthly
A couple reasons for this. 24 payrolls rather than 26 saves time and money for processing payroll. If you have 26 payrolls a year, there will be 2 months where 3 payrolls hit your cash flow for that month. Many people tend to miss this and do not adequately plan. Semi-monthly allows for easier budget planning to your cash flow.
How soon after the pay period do I need to pay my employees?
It depends on the state, In Illinois if you are paying semi-monthly you have up to 13 days. If your pay period falls between the 1st and the 15th you have until the 28th to release those checks to your employees.
Important Points
You MUST be consistent with your payroll policies.
You cannot pay weekly one month and change to semi-monthly the next.
Your company payroll policy must be published in writing and understood by your employees.
In addition to being easily accessible, such as the employee manual.
01/06/2019
By: Gary Grottke, CPA, Quality Back Office LLC