Can We Change Our Payroll Frequency Mid-year?

by Rhonda

We pay our employees bi-weekly on Mondays. This worked well with our office manager who only works part-time for us. At the time of this decision she and our cleaning person were our only employees. We used only sub-contractors for our construction business.

Now however, we have hired additional employees for our business. We would like to change our pay schedule to weekly and on Fridays. Can we change our pay schedule mid-year and what does that entail?

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Changing From Bi-Weekly to Weekly Payroll
by: Best Business Payroll

The short answer to both your questions is Yes: You may make the switch mid year from bi-weekly payroll to weekly, and you may move your pay day from Monday to Friday. It is perfectly legal and acceptable to change both mid-year.

You are in a much easier situation than others who want to do the reverse (moving from weekly to bi-weekly) because often the biggest obstacle is that employees resent being paid less frequently. (For more on that, see our response to "What Are The Benefits or Drawbacks to Switching From Weekly Payroll to Bi-Weekly Payroll?" also in our FAQ section) In your case, your employees will actually wind up getting paid twice as often, and will probably appreciate that fact.

Moving the payday from Monday to Friday can be accomplished in two ways. First, make the last pay date of your old schedule on a Monday as you have been doing. Then make the next week a "short" week, and give your employees another paycheck on Friday. Second, you may make the first paycheck of your new schedule a "long" week and wait until the second Friday after your Monday pay date.

Your employees will probably prefer the two-paychecks-in-one-week choice though; they may have bills due which will be difficult to manage with the extra time; however, you are also moving from bi-weekly to weekly, so that may not be an issue. Either option will work for you.

As for moving from bi-weekly to weekly, that will be a snap: simply inform your payroll company (if you outsource) or change the pay frequency in your payroll software, so you can start calculating pay based on one week instead of two.

Best of luck for a smooth transition.

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