Payroll Play 2/10: How to change Payroll Frequency for your business?

Considering a Payroll Frequency Change? Here’s What You Need to Know

Changing how often you run payroll isn’t a decision to take lightly. It impacts everything from your cash flow to employee satisfaction. Before you dive in, there are a few key things to consider. This guide will help you navigate the process, whether managing payroll with the latest HR and payroll software or juggling multiple systems.

Why Think About Payroll Frequency?

Maybe you’re looking to improve your cash flow, or perhaps you need to tailor pay cycles for different types of employees—like hourly versus salaried workers. Whatever the reason, adjusting payroll frequency can be a game-changer, but it’s all about doing it right.

Steps to Make the Shift Smoothly

1. Start with Compliance

First, make sure you’re not stepping on any legal landmines. You’ll need to comply with federal and state laws, and that’s where solid payroll tax software comes in handy. It helps ensure everything is up to snuff, no matter where your team is based.

1. Check Your Cash Flow

Next up, take a hard look at your company’s finances. Can you handle more frequent payroll runs? Or would a less frequent cycle free up some cash? Payroll business software can help you project the impact on your cash flow to make an informed decision.

1. Choose the Right Payroll Cycle

• Weekly Payroll: Employees love getting paid weekly, but it can be a headache if you’re handling everything manually. If you go this route, ensure you have payroll HR software that can automate the process without adding hours to your workweek.
• Bi-weekly Payroll: This middle-ground option is popular because it keeps employees and admins happy. Plus, with the right HR and payroll software, you can keep everything running smoothly.
• Semi-Monthly Payroll: If you’ve got a lot of salaried employees, this might be your best bet. It reduces the number of payrolls you must run yearly, saving you time and money.
• Monthly Payroll is not a favorite among employees, but it’s the simplest and most cost-effective for employers. Payroll processing systems can ensure it’s done right.
• Earned Wage Access (EWA): If you’re considering EWA, make sure your payroll systems and software comply with all wage laws and regulations.

1. Update Pay and Deduction Amounts

When you change payroll frequency, you must update tax and deduction amounts in your payroll software. It’s crucial to keep everything consistent and accurate so nobody ends up shortchanged—or worse, overpaid.

1. Align Your PTO Plan

Don’t forget about paid time off. You must ensure your PTO plan aligns with the new payroll schedule. A good HR payroll management software will help you keep track of everything so there are no surprises.

1. Communicate with Your Team

Nobody likes surprises, especially when it comes to paychecks. Communicate the new payroll schedule clearly and well in advance. Use your employee benefits portal or HR Connect payroll system to keep everyone in the loop.

1. Update Contracts

Finally, remember to update your contract templates to reflect the new payroll schedule. Attention to detail really matters here, and your payroll HR software should make it easy to keep everything consistent.

What to Expect After the Change

Here’s what you can expect when you get your payroll frequency just right:

• Better Cash Flow Management: Adjusting payroll frequency can give you more control over cash flow, especially with the help of HR and payroll software.
• Happier Employees: While more frequent paydays can strain your cash flow, they’re a big hit with employees. Conversely, less frequent payroll can help conserve cash, but it might not be as popular.
• Tailored Pay Cycles: Customizing pay cycles with payroll processing systems to fit your team’s needs can boost retention and satisfaction.
• Staying Compliant: By aligning everything to payroll laws, you’ll reduce legal risks and keep operations running smoothly.

Switching to a different payroll frequency isn’t just about crunching numbers—it’s about finding the right balance for your business and your people. With the right software for payroll and a solid strategy, you can keep your team happy while keeping your finances on track.

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