Weekly Payroll: How It Can Boost Employee Morale and Retention

Are you considering using or switching to weekly payroll for your small business? Setting up payroll is one of the most important parts of running a business, so you want to get it right. But options range from weekly and biweekly to monthly, so how do you decide what’s right for your team? 

A weekly payroll schedule can improve employee satisfaction and retention. It can also simplify your payroll processing and enhance cash flow management. Read on to decide if this payroll structure is right for you.

What is weekly payroll?

Weekly payroll is a payroll schedule where employees receive their wages every week. This means that instead of waiting two weeks or a month for their paycheck, employees get paid at the end of each week. 

Typically, the pay period starts on Sunday and ends on Saturday. This regularity helps both employees and employers manage their finances more effectively.

For employees, weekly pay means more frequent access to their earnings, which can help them manage their expenses better. For employers, it means a consistent payroll schedule that can simplify the payroll process and reduce errors. 

Benefits of weekly pay schedules for small businesses.

As a small business owner, it’s important to find ways to keep your team happy and your operations running smoothly. What is weekly pay going to do for you? At a glance, weekly payroll might seem like it adds extra work, but it can offer significant advantages. Here’s how:

Improve employee satisfaction and retention.

So how does weekly pay work to help retain employees? Simply put, many employees want to be paid more frequently, especially those who may be living paycheck to paycheck. Employees are more likely to stay with a business that meets their financial needs promptly. Given how important employee retention is, any strategy that helps with keeping your talent should be worth considering. 

Timely compensation for your team can demonstrate how your business values their hard work and boost employee morale and loyalty. When you’re running payroll weekly, your hourly workers can rest assured that they’ll be able to budget for the week to come..

Attract top talent.

In a competitive job market, offering weekly payroll can set your business apart. Many job seekers look for employers who provide frequent pay, as it aligns better with their financial needs. This perk can be a deciding factor for candidates choosing between multiple job offers.

When your small business is competing with every other business in your industry for top talent,  demonstrating that your business is progressive and attentive to the needs of its employees could be the difference that tips the scale in your favor. This can attract high-quality candidates who might otherwise consider larger employers.

Simplify payroll processing.

At first, the idea of a weekly payroll calendar might sound like twice the work of a biweekly one. But actually, a weekly payroll schedule creates a predictable routine for payroll processing. This consistency makes it easier to manage and plan payroll tasks. No more keeping track of different employees on different biweekly pay rotations!

You or your payroll administrator can develop a regular workflow, reducing the chances of last-minute rushes and errors.Any discrepancies in hours worked or pay calculations can also be identified and corrected quickly. This reduces the risk of payroll mistakes that can lead to employee dissatisfaction and potential legal issues.

Factoring in things like holidays and days off will also be easier on a weekly payroll schedule, since your pay periods are more consistent. And with a weekly payroll sheet, that means less tracking down employees for hours worked earlier in the pay period.

Enhance cash flow management.

Managing your cash flow becomes more straightforward with weekly payroll. Smaller, more frequent payments are easier to handle than larger, infrequent ones. This regular, predictable outflow of cash helps maintain a steady financial balance and avoid sudden large expenses.

Is it better to be paid weekly or biweekly? 

Is weekly pay better? Or biweekly? There’s no simple answer, because every small business is different. Here’s what you need to consider before making a change to your payroll schedule:

• Business cash flow. Assess your business’s cash flow to see how it aligns with each payroll schedule. Weekly payroll requires more frequent cash outflows, which can be challenging if your cash flow is tight, whereas biweekly payroll has less frequent payments.
• Cost of payroll processing. Each payroll run incurs costs, whether you handle it in-house or use a payroll service provider. By opting for biweekly payroll, you cut the number of payroll runs in half, which can significantly reduce these costs. This can be especially beneficial for small businesses looking to minimize expenses while still providing timely compensation to employees.
• Employee preferences. Consider what your employees prefer. Some employees might favor the regularity of weekly paychecks, while others might be comfortable with biweekly payments. Gathering feedback from your team can help you make a decision that keeps your employees happy and engaged.
• Industry standards. Some industries have standard payroll practices that might influence your decision. For example, industries with more hourly workers might lean towards weekly payroll, while others with more salaried employees might prefer biweekly payroll. Aligning with industry standards can help you remain competitive in attracting and retaining talent.

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How to use weekly payroll for your small business.

How does weekly payroll work for your business? It can depend on how big your team is and your payroll system, but with the right steps, it can be a smooth transition. Whether you’re ready to make the switch because you’ve decided that weekly pay is better for your small business, or you’re starting a business using weekly payroll, here are some important steps to follow.

Choose or update your payroll system.

Start by selecting the right payroll system for your business. You have two main options: using payroll software or outsourcing to a payroll service provider. Payroll software offers flexibility and control, allowing you to manage payroll in-house. 

Look for software or a payroll app that handles weekly payroll, tracks hours, and calculates deductions. If you prefer to outsource, choose a reliable payroll service provider that specializes in weekly payroll. This can save time and reduce the administrative burden on your team.

And if you already have a payroll system, take time to ensure it aligns with a weekly payroll run. If it doesn’t, it may be worth considering other options like Homebase, which has a suite of tools dedicated to hourly teams including easy payroll processing.

Establish pay periods and deadlines.

Next, define your weekly pay schedule. Decide on the start and end dates for each pay period. Typically, a weekly pay period starts on Sunday and ends on Saturday. Consistency is key to avoid confusion. 

Once you have your schedule, set clear deadlines for timesheet submissions and payroll processing. For example, require employees to submit their timesheets by the end of the day on Saturday, and process payroll by Tuesday to ensure timely payments. Clear deadlines help streamline the process and ensure everyone knows what to expect.

Communicate with employees.

Effective communication is vital when transitioning to weekly payroll. Inform your staff about the change well in advance. Explain the benefits of weekly payroll and how it will work. Provide detailed instructions on how to track their hours and submit timesheets. Make sure they know how to access their pay stubs, whether through an online portal, email, or physical copies. 

Address any questions or concerns they may have to ensure a smooth transition. Keeping everyone informed helps avoid misunderstandings and ensures a positive experience for your employees.

If you’re starting a business on weekly payroll off the bat, you’ll still want to provide all of the above information. Include these items in employee training and ensure it is easily available in your employee handbook.

Run payroll and distribute wages.

Once everything is set up, it's time to run payroll. Process payroll every week according to your established schedule. Calculate each employee’s gross pay based on the hours worked, apply any necessary deductions, and determine the net pay. Use your chosen payroll system to handle these calculations accurately. 

Distribute wages via direct deposit, checks, or pay cards, depending on what works best for your business and employees. Direct deposit is often the most convenient option, ensuring employees receive their pay promptly. Regularly review the payroll process to identify any issues and make improvements as needed.

Get payroll peace of mind.

When you run a small business, every minute spent on payroll is time diverted from helping your business grow. If the benefits of weekly payroll sound attractive but the administrative work stops you from implementing it, then it’s time to get the tools to help. 

Homebase was created as an all-in-one app for hourly teams so that your time tracking, timesheets, and scheduling connect directly to payroll. Get started today to save valuable time to spend on growing your business.