A payroll pay period is the frequency (how often) your company pays its team members.
For more information on setting up your pay periods , read our article Setting up your pay periods on Paycircle.
The most common period is monthly but some companies pay weekly and some (much fewer) pay fortnightly, four weekly, quarterly or annually. The pay period consists of a day or date that the period starts and the day or date that the period ends. There is normally a ‘cut off’ day or date, whereby no further adjustments or changes can be made to the payroll for that period (this is to enable time for processing ready for payment) and then there is the payment date, which is the day or date that people physically get paid.
So, there are normally four key days or dates in the payroll process:
The period start date, the period end date, the cut of date (for processing) and the payment date. You may also have a day or date that you send payslips to your team which is different to your the payment date.
The most common pay period is from the first day of the month until the last day of the month, with the payment date being either the very last day or the last working day (or the last Friday) of each month. The ‘cut off’ day varies depending upon how complicated or large the payroll is or how easy it is to make last minute adjustments (very easy with Paycircle!).
A quick note about ‘payments in arrears’. Paying someone in ‘arrears’ means that they are being paid outside of the period in which they have worked. For example, if a company runs a weekly payroll and a pay period runs from Monday 1st October to Sunday 7th October but the team are paid the following Friday 12th October (not Friday 5th October), this is classed as payment in arrears.
There are many variations of payroll processes and most businesses develop their own based upon their own needs or the need of their employees. The key dates for setting up payroll, the ones that affect sending the correct data to HMRC each period, are start date and end date – and of course the payment date matters to you and your team!
If you are thinking about changing your pay periods, say from weekly to monthly, or would just like some more information on pay periods, please contact our support team. We are on hand to help and we can make sure that you get everything up correctly within Paycircle and with HMRC.
You can also take a look at HMRC’s published notes on changing pay periods.