Pay period
The recurring window of time that one payroll run covers, such as a week, a fortnight, or twice a month.
A pay period is the recurring window that a single payroll run covers. Weekly, fortnightly, semi-monthly and monthly are the common shapes. It sets the rhythm of the whole back office: when timesheets close, when approvals are due, when corrections stop being edits and start being adjustments on the next run.
Why the boundary causes trouble
Overtime is usually calculated per week, and a pay period does not always contain whole weeks. A semi-monthly period ending on the fifteenth cuts through the middle of a working week, so the hours that decide whether somebody crossed an overtime threshold sit in two different runs. Getting this wrong underpays premium hours, which is the error most likely to become a claim.
- Which weekday the overtime week starts on
- Whether the period boundary splits a working week
- How an overnight shift is attributed when it crosses midnight
- The cut-off for approvals, and what happens to a late correction
Choosing one
Shorter periods pay staff sooner and keep corrections close to the shift they belong to, at the cost of more payroll runs. Longer periods are cheaper to administer and harder to fix. For hourly shift work, weekly or fortnightly usually wins, because the memory of a disputed shift fades fast and a correction is far easier while somebody still remembers the day.
“Pick the period your team can still remember clearly when a question about it arrives.”
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