What To Consider When Setting Up A Pay Schedule
Step no. 1: Analyze what type of employees you have
Choosing the right pay schedule may seem like a simple decision, but there are some important factors that go into it, including employee attitude, Department of Labor regulations, payroll cost, and taxes and benefits. The first step toward choosing the right schedule for your business is analyzing what type of employees you have.
"What you'll want to do is to choose one that is beneficial to the business as well as the employee," said Andrew Schrage, CEO of Money Crashers. "Fail to take the worker into account, and your turnover rate could skyrocket. Having said that, you have four main options: weekly, biweekly, semimonthly and monthly."
Once you've considered what's best for your employees, visit the Department of Labor's website to see the payment requirements in your state. Laws vary by state and pay period type. Some states, for example, don't allow for monthly pay periods. After checking in on your state's regulations, talk with your accounting department or payroll specialist to determine what schedule is best for your business. There are often taxes, benefits costs and processing costs that impact which schedule is best for your business.
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