What Is a Pay Period?

A pay period refers to the time during which you or your employees earn their wages. During this time, employers track their employees’ hours and calculate their earnings.

How long is a pay period? The majority of employees in the U.S. are paid on a biweekly pay period, receiving a paycheck every other week. However, pay periods typically range from weekly to monthly in duration.¹

Pay period vs. payday

A payday is the day employees receive their earnings from the corresponding pay period. The employer sets pay periods and pay dates for their employees. Shorter pay periods with more frequent paydays can help workers budget more effectively since they have access to a more consistent cash flow.

People who are paid monthly may find it more challenging to stretch their earnings to the end of the month. As a result, they may be tempted to borrow money from other sources, such as payday loans, to cover their expenses until their next paycheck.

The most common pay period lengths are daily, weekly, biweekly, semimonthly, monthly, fixed-length, and custom. How do pay periods work? Learn more about each type of pay period, along with its pros and cons, below.

Daily pay periods

With a daily pay period, the employee receives a paycheck every day they work, resulting in 365 pay periods per year. Someone who works a regular workweek schedule with no weekends can expect about 260 pay periods per year.

Around 50% of Gen Z workers believe they would benefit from getting paid more frequently than they currently do.² However, employers might find that a daily pay schedule increases payroll costs associated with processing payments.

Several side hustles and gig-economy jobs, such as driving for Uber Eats or walking dogs, offer the opportunity to earn a daily paycheck.

Weekly pay periods

Employees on a weekly pay period receive a paycheck and pay stub once per week, resulting in approximately 52 pay periods per year.

Approximately 27% of workers have a weekly pay period.¹ This pay period length is more common in areas such as construction and mining.

While weekly pay can provide employees with more flexibility and financial control, employers might find it increases their processing time and, potentially, their deposit fees.

Biweekly pay periods

What is a biweekly pay period? Employees will receive a paycheck every two weeks, resulting in approximately 26 pay periods per year. This is the most common pay period length in the U.S., with 43% of workers on a biweekly pay schedule.¹

Employers might gravitate to this schedule because it is more cost-effective than a daily or weekly pay schedule, and the turnaround isn’t as fast.

Employees are likely used to this pay schedule, as it is so common, but they may prefer the flexibility of a daily or weekly paycheck.

Semimonthly pay periods

What is a semimonthly pay period? Employees will receive a paycheck twice per month, resulting in 24 pay periods each year. This is slightly less than the bi-weekly pay period, as some months have three pay periods. Around 20% of U.S. employees are paid semimonthly.¹

Similar to a bi-weekly schedule, employers may prefer a semimonthly schedule because it can reduce administrative time and fees compared to a daily or weekly schedule. However, employees often prefer receiving a paycheck more frequently.

Monthly pay periods

With a monthly pay period, employees receive one paycheck per month, resulting in 12 pay periods per year. It is the least common option in the U.S., with only 10.3% of workers receiving monthly pay.¹

A monthly pay schedule can make it more challenging for employees to manage their budget. However, employers might like a monthly schedule because it’s a more time- and cost-effective option.

Fixed-length pay periods

Fixed-length pay periods pay the same amount on each payday, regardless of the number of hours the employee has worked. This type of pay period is often available for teachers and other educational staff, who can opt to be paid year-round even though they have summers off.

From an employer’s perspective, a fixed-length pay period doesn’t let them reward high performers or incentivize low performers as easily as other types of pay periods.

Custom pay periods

An employer might work out a customer pay period schedule that works best for their employees and the company. This type of pay period is common with seasonal or project-based employees and can be used to pay a former employee after they resign or are terminated.

This type of pay period offers more flexibility, especially for employees who work sporadically. However, it can make it harder for employees to budget, as they might not know when direct deposit hits, and it can increase the chances of errors on the employer’s end.

If you’re an employer wondering about the best pay period for your business, consider the following when making your decision.

• Employment laws and regulations: Some states have laws that regulate the frequency of pay periods. For instance, California employers are required to pay employees at least twice a month on regularly scheduled paydays.³
• Workweeks: The Fair Labor Standards Act (FLSA) defines a workweek as “a period of 168 hours during seven consecutive 24-hour periods.” ⁴ As an employer, you can begin your workweek on any day and at any hour.
• Overtime: Overtime calculations are based on a single workweek. According to the FLSA, employers can’t average overtime among two or more workweeks.⁴ It may be more convenient to pay employees who work overtime on a weekly basis.
• Payroll costs: Consider the time and expense associated with different pay periods. More frequent pay periods, such as daily and weekly, are often associated with higher administrative and processing costs.
• Employee needs: To attract and retain talent, consider the wants and needs of your employees. Many younger employees would prefer a more frequent pay schedule.²
• Reporting: The FLSA requires employers to record the number of hours an employee works per day, hours worked per workweek, overtime earnings, total wages paid per pay period, the date of payment, and additions and deductions from the employee’s wages.⁴ For simplicity, you may choose to align your pay periods with your financial reporting periods.
• Withholdings: You are required to withhold employment taxes from employees. Because employers must calculate the amount to withhold based on the pay period, more pay periods result in more frequent calculations. You can use payroll software to help make this process easier.
• Business industry: Certain industries often have more frequent pay periods. For instance, a weekly schedule is typical in construction and manufacturing, whereas a biweekly schedule is more common in education, healthcare, and information industries.¹
• Salary type: Your choice of pay period may depend on whether you have hourly employees or salaried employees, as well as the nature of your company’s work.

Although most people are paid on a biweekly basis, half of Gen Z would prefer to be paid more frequently.² Your pay period can impact how you budget, how much of your paycheck you save, and how quickly you’re able to pay off credit card debt.

Learn about the difference between gross and net pay to estimate your paycheck and improve your budgeting skills.