Chime® is a financial technology company, not a bank. Banking services, credit, and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

What Is a Pay Period? Types and Benefits

Jessica Martel • February 2, 2024

Woman using phone to deposit paycheck

A pay period is a regularly scheduled amount of time in which an employee’s hours are tracked, and their earnings are calculated. Pay periods typically range from one week to one month. According to the U.S. Bureau of Labor Statistics, the most common pay period is biweekly (every two weeks).¹ For instance, a biweekly pay period would start on June 1st and end on June 15th.

To help you understand everything you need to know about pay periods, this article will answer the following questions: what is a pay period, how do pay periods work, and how many pay periods are in a year?

Better online banking

  • Checking Account with no monthly fees
  • 50,000+ fee-free ATMs~
  • Chime Visa® Debit Card
Get Started

Pay period vs. payday: Differences explained

A pay period represents how often an employee is paid. It’s a timeframe in which your hours and benefits are tracked, and then you are paid accordingly. For example, your pay period might be weekly, biweekly, or monthly.

A payday is the day you receive your paycheck. Your paycheck represents your earnings for the previous week, two weeks, months, or whatever pay period your employer uses.

While you don’t usually get to choose how often you get paid, having a payday every week or every two weeks can help you budget more effectively. This is because you have access to a more consistent cash flow.

If you’re paid monthly, you might find it challenging to stretch your earnings to the end of the month. As a result, you might be tempted to borrow money from other sources, like payday loans, to cover your expenses until your next check.

Different types of pay periods

Employers use different types of pay periods. While the most common pay period is biweekly, there is no one “correct” type of pay period.

Some of the most common lengths of pay periods include:

Daily

You receive a paycheck every day you work, which could result in 365 pay periods per year. If you work a regular workweek schedule with no weekends, you can expect about 260 pay periods per year.

Weekly

You receive a paycheck and pay stub once per week, resulting in approximately 52 pay periods per year.

Biweekly

You receive a paycheck every two weeks, resulting in approximately 26 pay periods per year. This is the most common length of pay period in the U.S.

Monthly

You receive one paycheck per month, resulting in 12 pay periods per year.

Semimonthly

You receive a paycheck twice per month, resulting in 24 pay periods each year.

Quarterly

You receive a paycheck each quarter, resulting in four pay periods per year.

Custom

Your employer might work out a customer pay period schedule that works best for you and the company.

Pay periods: pros and cons to consider

Depending on your personal preferences, your lifestyle, and how you manage your budget, you might prefer a certain pay period over another. Each pay period comes with unique pros and cons to consider.

Daily

A daily pay period means you get paid every day, which is about 260 business days 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 administrative costs associated with processing payments.

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

Pros

  • Increased flexibility for employees
  • Reduces the need for short-term borrowing

Cons

  • Challenging for employees to save
  • Higher administrative costs for the employer

Weekly

Employees who get paid weekly can expect 52 paychecks per year. Approximately 27% of workers have a weekly pay period, according to the U.S. Bureau of Labor Statistics.¹ Jobs in areas such as construction and mining tend to have higher rates of weekly pay periods.

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

Pros

  • Increased flexibility for employees
  • More financial control

Cons

  • Increased processing time for employer
  • More fees associated with processing deposits

Bi-Weekly

A bi-weekly pay period results in approximately 26 paychecks per year. This is the most common pay period used by employers in the U.S.

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 since it is so common, but they might prefer the flexibility of a daily or weekly paycheck.

Pros

  • Both employers and employees are familiar with this schedule
  • Fewer administrative fees compared to daily or weekly

Cons

  • Many employees prefer a more frequent pay schedule
  • Not ideal for hourly employees

Monthly

A monthly pay schedule results in 12 pay days per year. It is the least common option in the U.S., and for good reason.¹

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

Pros

  • Time and cost-effective for employers

Cons

  • Difficult for employees to budget
  • Not ideal for hourly employees

Semimonthly

With a semimonthly pay schedule, you get paid twice per month, resulting in 24 paychecks per year. This is slightly less than the bi-weekly pay period, as there are some months with three pay periods.

Similar to a bi-weekly schedule, employers might like a semimonthly schedule because it can reduce administrative time and fees compared to a daily or weekly schedule. However, employees might prefer a more frequent paycheck.

Pros

  • Fewer administrative fees compared to daily or weekly
  • Employee paychecks are larger than with a bi-weekly schedule

Cons

  • Many employees prefer a more frequent pay schedule
  • Not ideal for hourly employees

Quarterly

You receive a paycheck every three months with a quarterly pay period, resulting in four pay periods per year.

Employers might prefer a quarterly schedule as it can reduce the time and money spent on payroll. However, employers might find it challenging to recruit employees who are open to receiving a paycheck quarterly.

While a quarterly pay period is not common, self-employed individuals or company executives might use a quarterly structure. These are typically high-earners who don’t need a regular paycheck to get by.

Pros

  • Time and cost savings for employers

Cons

  • Limited cash flow for employees
  • Difficult for employers to recruit
Set up direct deposit with Chime to get paid up to two days early.*

How to choose a pay period

When it comes to how an employer chooses a pay period, there are a few factors to consider, including:

Employment laws and regulations

Certain states have payday laws that require employers to pay their employees according to regulated pay periods. For instance, in California, employers must pay employees at least twice per month on regularly scheduled paydays.³

Workweeks

According to the Fair Labor Standards Act (FLSA), each employer has to define their workweek. A workweek is “a period of 168 hours during seven consecutive 24-hour periods.”⁴ Employers can begin their 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 As a result, employers with employees who work overtime might find it easier to pay them on a weekly basis.

Payroll costs

Employers will also consider the time and expense associated with different pay periods. More frequent pay periods (like daily and weekly) are often associated with higher administrative and processing costs.

Employee needs

To attract and retain talent, employers should also consider the wants and needs of their employees. Many younger employees feel they would benefit from a more frequent pay schedule.²

Reporting

The FLSA requires employers to keep records that include how many hours an employee works per day, how many hours they work each workweek, overtime earnings, total wages paid per pay period, the date of payment, and additions and deductions from the employee’s wage.⁴ Employers may choose to align their pay periods with their financial reporting.

Withholdings

As part of payroll, employers are required to withhold employment taxes from employees. Employers have to calculate how much to withhold based on the pay period. More pay periods result in more frequent calculations.

To simplify the process, employers can use software to calculate withholdings and streamline the payroll process.

Business industry

Particular pay periods are often more common within certain industries. For instance, a weekly schedule is common in construction and manufacturing, while a biweekly or semimonthly schedule is common in education, health services, and the information industry.¹

Salary type

Your employer’s choice of pay period might depend on whether you are an hourly or salaried worker and the type of work your company does.

What is your ideal pay period?

How frequently you receive a paycheck impacts how you budget, your cash flow to cover your credit card payment, and whether you might need to take on a short-term loan to make it to your next paycheck. While longer pay periods can benefit many employers, many employees prefer to get paid more frequently.

Learn more about the difference between gross and net pay.

Better online banking

  • Checking Account with no monthly fees
  • 50,000+ fee-free ATMs~
  • Chime Visa® Debit Card
Get Started

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

By clicking on some of the links above, you will leave the Chime website and be directed to a third-party website. The privacy practices of those third parties may differ from those of Chime. We recommend you review the privacy statements of those third party websites, as Chime is not responsible for those third parties' privacy or security practices.

Third-party trademarks referenced for informational purposes only; no endorsements implied.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

¹ Information from the U.S. Bureau of Labor Statistics, "Current Employment Statistics" as of January 7, 2024: https://www.bls.gov/ces/publications/length-pay-period.htm

² Information from the DailyPay's "Gen Z hourly workers say employers should help manage financial stress" as of January 8, 2024: https://www.dailypay.com/harris-poll/gen-z-workforce/

³ Information from the State of California's Department of Industrial Relations, "Paydays, pay periods, and the final wages," as of January 7, 2024: https://www.dir.ca.gov/dlse/faq_paydays.htm

⁴ Information from the US Department of Labor's "Handy references guide to the Fair Labor Standards Act" as of January 8, 2024: https://www.dol.gov/agencies/whd/compliance-assistance/handy-reference-guide-flsa#12

* Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

~ Out-of-network ATM withdrawal and over the counter advance fees may apply.

Address: 101 California Street, Floor 5, San Francisco, CA 94111, United States.

No customer support available at HQ. Customer support details available on the website.

© 2013-2024 Chime Financial, Inc. All rights reserved.