At startup, small business owners make one decision after another. Deciding how and when to pay employees is an important one. You must address these questions when setting up payroll for a small business.
Whether you have one employee or several, you’ll need to maintain compliance with tax and employment laws and consistently meet payroll obligations.
Knowing how many pay periods are in a year can help you establish an efficient payroll management system and help employees plan their finances.
An important step is selecting the best pay frequency for your business while maintaining compliance with applicable laws.
Which Pay Frequency is Right for Your Business
Determining pay frequency is more than a routine administrative task. It’s a strategic business decision.
In addition, the Fair Labor Standards Act requires that you pay employees on a regular, predetermined payday each pay period with additional requirements established under state laws.
Choosing a payroll schedule that aligns with business cycles can help make financial management easier. A clear pay schedule can also contribute to employee morale and trust. A predictable schedule allows employees to budget effectively.
So, what is the best pay frequency?
Short answer: The one that works for you.
But it’s a bit more complicated.
You also need to consider:
- Industry standards as well as local, state and federal law. Depending on where your employees work and the type of industry you operate in, there may be regulatory guidelines related to the type of payroll schedule you need to follow.
- Business size and cash flow. Some smaller businesses may prefer fewer paydays to help manage cash flow better.
- Your time and administrative costs. More frequent paydays can mean you’ll spend more time processing payroll. Balancing pay frequency with administrative efficiency is crucial for small business owners.
What is Pay Frequency?
A pay frequency is a recurring schedule your business follows to pay employees. It serves as a foundation for calculating payroll, taxes, and deductions.
Some common pay frequencies include weekly, biweekly, semimonthly, and monthly.
Pay Periods vs Pay Dates
There is a difference between pay periods and pay dates.
A pay period is the timeframe for which employee pay is calculated and then paid. For example, a biweekly pay frequency, where payday occurs every two weeks, usually means employee pay is also being calculated using a two-week pay period.
The pay date, or payday, is when the employees receive their compensation for the completed pay period. This usually happens after the pay period ends to allow time for payroll processing.
Types of Pay Frequencies
Depending on applicable legal requirements, employers may be able to choose from several pay frequencies. Each offers different considerations for your business.
- Weekly: Employees get paid once a week on a designated date, such as every Friday.
- Biweekly: Employees get paid every two weeks, totaling 26 pay periods in a standard year.
- Semimonthly: Employees get paid twice a month—or 24 pay periods a year. On this schedule, employees are paid on the same dates each month, such as the 1st and 15th of the month. If one or both of those dates fall on a weekend, the pay date is typically the Friday before.
- Monthly: Employees get paid once a month, usually issued on the first or last day of the month. On this schedule, you will process payroll 12 times per calendar year.
How Many Pay Periods in a Year
The number of pay periods in a year depends on the pay frequency you pick for your business.
For example, a weekly pay frequency results in 52 pay periods. A monthly pay frequency has 12 pay periods in a year.
The four most common pay frequencies are:
- Weekly or 52 pay periods a year
- Biweekly or every two weeks, typically with 26 pay periods per calendar year, though some years may have 27
- Semimonthly or twice a month, with 24 pay periods annually
- Monthly with 12 pay periods each year
Most private companies pay biweekly, according to the Bureau of Labor Statistics (BLS) report.
- 43% pay biweekly
- 27% pay weekly
- 19.8% pay semimonthly
- 10.3% pay monthly
Here are some pros and cons of different pay frequencies to help you decide the best way to pay your employees.
Weekly
- Pros: Consistent, frequent pay can help employees manage expenses more effectively. It can also help attract and retain workers seeking regular income.
- Cons: A higher administrative burden to process payroll 52 times a year. This could increase payroll costs due to frequent transaction processing.
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Biweekly
- Pros: Compared to weekly, a biweekly pay schedule can offer some employers a better way to balance frequency and administrative time and costs.
- Cons: Employers should be more diligent about budgets to accommodate months with three pay periods.
Semimonthly
- Pros: If you’re paying salaried employees, you may find this schedule simple since you will run payroll on the same dates each month and the check amounts are typically the same each pay period. It can also reduce how much time you spend on payroll taxes and benefit administration tasks.
- Cons: Paying nonexempt employees can be complex because semimonthly pay periods do not always align with the standard workweek. This frequency requires extra attention when pay dates fall on weekends.
Monthly
- Pros: Running payroll monthly can potentially save you time, money, and resources.
- Cons: Paying nonexempt employees can be complex because monthly pay periods do not always align with the standard workweek. Many states do not allow a monthly pay schedule for nonexempt workers. Employees also may find it tougher to manage their personal finances on a monthly pay schedule.
Weekly vs Biweekly Payroll
Weekly payroll offers employees more frequent cash flow but increases administrative costs for businesses. Biweekly payroll can help strike a balance between frequent payments and administrative efficiency.
Monthly vs Semimonthly Payroll
Monthly and semimonthly payroll schedules provide consistency. Employees receive 12 paychecks under a monthly schedule and 24 paychecks under a semimonthly schedule.
Special Cases
Certain circumstances can affect the number of pay periods in a year, especially for biweekly schedules. These situations require employers to adapt their payroll process to meet legal and financial obligations.
The 27 Pay Period Anomaly
The 27th payroll anomaly happens when a biweekly payroll calendar includes 27 pay periods instead of the usual 26.
For a salaried employee, this can mean either an additional paycheck or smaller individual checks spread out over 27 pay periods instead of 26. While this may result in slightly smaller biweekly paychecks, the employee’s annual salary stays the same. Employers should communicate with employees to reduce any confusion.
A year with 27 payrolls usually occurs every 11 years. The last one was 2020, the next one will be 2031. This can vary based on how leap years and calendar dates align.
This extra pay period happens because the days in a year, including the extra day from leap years, accumulate over time. This eventually leads to an extra pay period. Employers should take care to plan for this rare alignment to address any budget impacts.
Leap Years and Pay Periods
While leap years don’t usually change the total number of pay periods in a year, they can affect the timing of each paycheck.
During a leap year, businesses on a monthly schedule could see payroll dates move forward.
Biweekly schedules are not usually affected by leap year. However, employers should be aware of how bank holidays and leap years coincide in case there is any overlap with payroll processing dates.
Bank Holidays
Banks do not process financial transactions on federal holidays. That means payroll direct deposits scheduled for a bank holiday will be processed the next business day.
When payday falls on a bank holiday, many businesses pay their employees a day early.
Depending on where your employees work and the type of industry you operate in, your state may provide guidelines for the type of payroll schedule you need to follow.
Frequently Asked Questions About Pay Periods
What is a payroll calendar?
A payroll calendar outlines the beginning and ending dates for each pay period and pay dates for a full calendar year. A payroll calendar can help employers and employees understand the timelines around payroll processing.
What are the benefits of using a payroll calendar?
Using a payroll calendar can help businesses streamline payroll operations and help process payroll and distribute checks in a timely and efficient manner. It can also help business owners better manage cash flow, accounting, and forecasting for the year.
Can I choose any day of the week as a pay date?
While employers may have some flexibility in choosing pay period dates, when choosing a payday, business owners should take applicable legal requirements along with their business needs and employee preferences into consideration.
How many biweekly pay periods are there in 2025?
In 2025 there are 26 biweekly pay periods on a traditional biweekly schedule. Employers should verify their payroll calendars, as variances in starting dates can sometimes lead to 27 pay periods.
Carefully Evaluate Your Options
No matter which pay period you choose for your small business, it’s vital to include space in your schedule to carefully process payroll and ensure your employees are paid accurately and timely.
That’s not all. You also need to protect your business from potential fines and penalties that can result from errors. To reduce the risk of errors, you’ll need to make sure you correctly calculate, withdraw and pay payroll taxes and administer benefits.
You don’t need to tackle this alone.
If you’re unsure about the payroll scheduling requirements in your state or need more advice, you should consult with your accountant, bookkeeper or financial adviser.
A payroll service provider, like SurePayroll® By Paychex, can help you simplify compensation planning, payroll processing and tax management, as well as offer access to affordable HR services and benefits.
* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up to date.
