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Weekly versus BiWeekly Payroll
Benefits & Compensation
Weekly versus BiWeekly Payroll
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Our company currently runs a weekly and bi-weekly payroll (bi-weekly for executives and all others run weekly). We are contemplating switching everybody to bi-weekly in order to not only save money bu
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Forums » Topic Forums » Benefits & Compensation » Weekly versus BiWeekly Payroll
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Weekly versus BiWeekly Payroll
posted at 8/3/2007 8:53 AM EDT
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Posts: 2
First: 8/3/2007 Last: 8/23/2007 |
Our company currently runs a weekly and bi-weekly payroll (bi-weekly for executives and all others run weekly). We are contemplating switching everybody to bi-weekly in order to not only save money but the time of a one person HR department who does payroll. I know many questions will arise (taxes, etc) and am looking for any advice one may have to share. |
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Weekly versus BiWeekly Payroll
posted at 8/3/2007 9:08 AM EDT
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Posts: 3870
First: 2/12/2002 Last: 11/2/2009 |
Usually the biggest complaint about changing payroll periods comes from those living paycheck to paycheck. Going to bi-weekly will mean that these folks will have to go without a paycheck for a week. Best advice to counter this is to make sure you get the word out to your employees well in advance of the event so that they can plan accordingly.
You might want to be proactive and do a comparison of the taxes, etc between weekly and bi-weekly to head off any criticism/rumors from those angles. You might also hear something that's pretty popular with the anti-capitalist ignorati these days, and that is that the company only wants to hang onto the worker's wages an extra week so they can reap some interest income off it. Having your facts handy to dispell that little bit of nonsense if and when you hear it might also be worthwhile. Anticipate a fair amount of background whining. People get into a routine and don't like to change, even if it means only having to go to the bank to make a deposit every 2 weeks instead of every week. But you're on the right track. Most companies these days do a bi-monthly or bi-weekly pay period simply because of the costs involved of processing 52 payrolls. |
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Weekly versus BiWeekly Payroll
posted at 8/3/2007 9:20 AM EDT
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Posts: 1103
First: 3/16/2007 Last: 8/19/2011 |
Nork spells it out well. I've done way to many of these as a result of significant M&A work. Advanced notification with lots of advice and counsel is imperative to success and keeping morale up. You may even want to consider allowing for advances with some payback arrangement for those who feel the need. I've rarely seen it taken up on but the gesture goes far.
Also, you may have garnishments (child support, bad debt, etc) that are occuring and the more advanced notice you give the better the affected parties can adjust as well. Unless your state has a hard and fast rule on how much notice I am aware of none. personally I would lobby for as much as I could get so that people can prepare. Also, the distribution of your company could also require you have extra time for appropriate communication. if you are in multiple states for example with limited e-mail access you obviously have to plan for that. |
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Weekly versus BiWeekly Payroll
posted at 8/22/2007 9:22 AM EDT
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Posts: 3870
First: 2/12/2002 Last: 11/2/2009 |
HRPRO's response was exactly what I was thinking - seems like any competent payroll person could make this a seamless transaction.
But amyzemak has an ADP.com email address, so I'm guessing she might have some insights we're both missing here. I'd love to know what they are. |
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Weekly versus BiWeekly Payroll
posted at 8/22/2007 9:32 AM EDT
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Posts: 1103
First: 3/16/2007 Last: 8/19/2011 |
Well I've done it often with ADP too Nork. There is NO tax issue. To suggest there is seems somehow illogical to me.
Admittedly any change would require reworking pre-tax deductions but that has no tax implication at the end of the year (and little if any in the course of the year). AND, on the off chance that somehow somebody miscalculated the 1040 will resolve that. |
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Weekly versus BiWeekly Payroll
posted at 8/23/2007 5:11 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I have switched payroll systems mid year and have dealt with the tax issue. A change will not so much the affect on the taxes paid side but on the historical side.
If she is combining two payrolls that have been processed separately (say under two different client codes/master files or whatever the payroll provider calls them), I am suspecting she will have to move historical information. And that is easier to do if it is BOY rather than mid-year. A quick and dirty solution would be to change the frequency and keep running two payrolls but on the same frequency until the BOY and then combine. I don't know how easy/hard it is to actually move records from one payroll to another or whether it is as simple as changing the payroll frequency/dept or whatever field is telling the system which payroll the person is calculated on each employee's record. It might just depend on the setup of the payrolls and the payroll system used. rr |
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Weekly versus BiWeekly Payroll
posted at 8/23/2007 6:11 AM EDT
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Posts: 2
First: 8/3/2007 Last: 8/23/2007 |
Both payrolls run under one company code and I would definitely start the beginning of the year. That gives me ample time to change accruals, work deductions, etc.
We have polled employees for their thoughts and have come out with a tie (imagine that). Most common question asked is about taxes as some have heard they are not quite exactly double what they currently have (i.e. $40 weekly does not equal $80 weekly). Other than that, it's just a change from what the employees are used to. |
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