A Complete Guide About: How to Calculate a Pay Period (2021)


According to one study, 36.5% of private businesses in the United States pay their employees every two weeks. As a business, you get to decide how often you want to pay your employees, but you’ll need to calculate your pay period first.

But how do you do that? Also, read out Loans SOS!

How to Calculate It

First, you’ll have to figure out how to calculate your pay. To do this, you’ll have to decide how often you want to pay your employees. There are a few different ways you can pay them.

But regardless of when you pay them, you should pay them by the hour they work. For example, if you have biweekly pay periods, you’ll see how many hours they worked for those two weeks.

Multiply those hours by the dollar amount they get per hour. Then you’ll be able to find their gross pay.

If your employees are on a salary, then you’ll have to pay them the same amount each period. To do this, you can divide their annual salary by how many pay periods you have each year.

Biweekly Pay Periods

With biweekly periods, you’ll pay your employees every other week. Most businesses end up using a pay stubs generator to send out their payments each Friday.

If you do this system, you’ll pay your employees twenty-six times each year.

This is the most common practice because it is the one that works best for employees and the employer. You won’t have to spend as much time sending out payments every week, but it will be enough for the employee to live off of until they receive their next check.

Monthly Pay Periods

If you want to spread out the payments a little bit more, you could use monthly pay periods.

With this, you will only pay your employees once per month, so they’ll have twelve total payments for the whole year.

These paychecks are normally sent on the same day of the month, whether it’s the first or last day of the month.

Many people like this method because it can save you time, and it’s easier for you to manage. However, it may not be best for employees who are working on an hourly wage.

Semi-Monthly Pay Periods

Lastly, you could try semi-monthly pay periods. This is similar to a biweekly pay period, but the difference is that these pay periods end on a fixed date.

Generally, they’re paid out on the first and fifteenth of each month, regardless of what day it is. This way employees know when to expect their checks, and they can be spread apart equally.

Learn More About How to Calculate a Pay Period

These are only a few ways to calculate your pay period, but there are many more things you can do as well.

We know that running a business can be exhausting and stressful at times, but thankfully, we’re here to help you out!

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