Alternatively, you may pay your employees weekly and have never considered moving to a monthly payroll cycle. This could be the result of union agreements, growth through acquisition or simply inadequate planning. Whatever the root cause may be, one thing is certain – inefficiency.
Having a higher frequency of misaligned payroll periods means that you will be collating, processing and verifying payroll data more often than is necessary. Not only will this cost more of your time, it will cost more in fees for payroll processing and you will most likely experience a higher error rate on your payroll.
A much more efficient option is to have a single, more centralised approach to your payroll solution where everyone is paid for the same time period at the same time on a monthly basis. The timing of making such a change is critical from an employee welfare point of view as well as a compliance perspective.
The following points should be considered:
- Bridge Loan. When switching from weekly to monthly, you should consider giving your employees an interest-free loan in the final weekly period to cover the bridge period. This can be automatically recovered through the payroll in future periods.
- Timing. For example, if you wanted to make September your first monthly payroll period, you must ensure that your last weekly payroll period finishes before tax month 6 (6th September to 5th October). The last weekly payroll period you should process is tax week 21.
To get a quote for payroll or to discuss your requirements give Dataplan a call on 03331 123456.