There are numerous factors that must be considered when choosing your company’s pay frequency. From accounting needs, HMRC deadlines and, most importantly, how it will affect your employees.
Monthly pay
A monthly pay frequency is one of the most common types for a business and is often the most appealing as it aligns easily with Real Time Information (RTI) specifications and makes meeting HMRC deadlines more simplified.
However, one of the major considerations of the monthly pay option is the financial strain that may be placed on employees as a result of the gap between each payday. In testing times, a more frequent pay could allow your employees to manage their cashflow more easily.
Four weekly pay
Four weekly payrolls encompass the same RTI simplicity, but with the added benefit of staff being paid more frequently. However it may also negatively affect other income areas for certain staff members. For instance those who claim Universal Credit. These benefits are calculated on a person’s income each calendar month, which means when they are on a four weekly pay frequency, they lose a month of benefits due to having two sets of pay within one month.
Fortnightly or weekly pay
Unlike a monthly or four weekly payroll, a fortnightly or weekly pay frequency allows for straightforward calculations and provides a smooth pathway for staff to budget their money.
This option can be attractive for retail businesses in order to reduce financial difficulties for their staff members who are often paid hourly and where work schedules are flexible from week to week. However, the requirements of HMRC and other payroll demands may mean this option is unsuitable for many businesses.
We’re here to help
As well as offering an expert outsourced payroll service, our team can help you weigh up your pay frequency options and their suitability for your particular circumstances. Get in touch with a member of our Payroll team below.
The Team
Our experienced and approachable team are on-hand to assist you, please get in touch below:
