There sometimes is some confusion between pay date and pay period. This blog will explain the difference.
An employer decides the pay period they will have when hiring their first employee. The typical pay periods are weekly, bi-weekly (every other week on the same day), and semi-monthly (twice a month). A weekly pay schedule will give 52 checks a year, bi-weekly will give 26, and semi-monthly 24 paychecks. This schedule does not usually change, and if the business does decide to change, written notice needs to be given to the employees so they can plan for the different pay dates.
The paycheck date is also generally decided by the employer before the first payroll is ever generated. Most employers do not have the pay date the same as the last day of the pay period. This does not allow time for processing (unless estimated hours are reported, or employees are salaried). However, I do find some owners have established the pay date on the same day the pay period ends because they thought they had to do so. When they find they need to outsource payroll, the date usually needs to be changed if direct deposit or physical checks are used.
So having the pay date after the pay period ends means earnings are paid in another period. For instance, if running payroll semi-monthly (1st-15th and 16th-end of month) the pay date falls into the next period. For the pay period ending December 31, the wages are paid in the next year. This sometimes confuses employees when they know they make $X per year, but their W2 shows a different figure.
Wages are always based on the date paid, not when earned. Therefore, the earnings reflected on the W2 may not match their annual gross salary. This is especially true if the employee earns more at the end of the year. Because the earnings from the prior second half of December payroll appear on the W2 and are less than the earnings the last half of December for this year, the employee may feel their wages have been under-reported. This is not the case.
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Candy
Yes, having the pay date after the period ends does mean wages are paid in a different period. However, if you pay semi-monthly, you still end up with 24 periods a year. And weekly would be 52. So although it does end up in a different period, there are still the same number of pay periods a year.
Yes, having the pay date after the period ends does mean wages are paid in a different period. However, if you pay semi-monthly, you still end up with 24 periods a year. And weekly would be 52. So although it does end up in a different period, there are still the same number of pay periods a year.
Yes, the 2nd payroll for the month in a semi-weekly period is paid in the next month. And the final pay period of the year is paid in the next year.