Pay day. One of the best days of the week or month, depending on when exactly you receive compensation for any work completed. However, whether you are a business owner in charge of executing a payroll and cutting checks or simply an employee, did you know that the frequency with which you receive payment can have an impact on your finances? Typically there are two different types of employees, detailed below, and when these individuals receive payment for their services is something a majority of people don’t give its proper consideration.
Many factors contribute to the amount brought home but figuring out taxes, pay, and more on leap days can be tricky. Fortunately, this issue only rolls around once every four years but it is something that should be granted attention regardless of if you are the employee or employer. Understanding the pay periods, frequency, and rate of pay for individuals can be important for both - if given an option, consider the pros and cons of each before moving forward with any decisions.
First, there are traditionally two various types of compensation rates - hourly and salary.
Hourly employees earn various amounts based on the amount of time they are ‘on the clock’. These workers usually have a set pay period and any time accumulated over that span is then paid for at once.
Those who receive a salary make a certain amount regardless of the amount of time spent either on or at work. This amount is usually broken down over the course of an entire year and then distributed at certain intervals.
Weekly paychecks are most commonly reserved for those hourly employees. Since their time at work may change from one week to the next, these amounts can be easily deciphered and paid correctly over each and every week. Referred to as ‘paid in arrears’ - this means payment for the work is usually one week behind actual completion.
Those who receive paychecks once every two weeks are subject to the bi-weekly system. This allows individuals to receive income usually twice a month which can be good for employees who have certain bills due at various times over the course of any calendar month.
Most salaried employees receive monthly payments. Figured by taking their annual salary and dividing by 12, the total is then disbursed once each and every month. While the check may be larger than other payment segments, this can take a bit more budget management in order to ensure all funds last until the following pay period.
Another convenient option for salaried employees, semi-monthly pay doesn’t require the same sort of stretch between checks and individuals have a little more sense of income - receiving 24 payments in lieu of the usual one per month.
If you are in need of a particular level of support for the finances of your business or wish to take a closer look into your own personal finances, then let the tax experts
at Bloch Rothman and Associates assist you or your business today. In addition, they can also take care of multiple other issues dealing with paying or owing back taxes, required audits from other entities besides the IRS, or any other personal or corporate wealth management issues. Along with providing a quality tax service, our group can also complete tax returns or answer any other factors associated with financial issues or concerns you may have. Serving in Denver and all of the surrounding areas for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us today. Available for all of your tax needs and filings, there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!