Pay Period

What is a Pay Period?

A pay period, or payment period, is the designated span of time an employer uses to calculate an employee’s earnings based on how many hours they worked. It defines when work hours are tracked (whether for hourly or salaried wages) and determines the timing of each payroll cycle. Payroll teams use that data to withhold taxes and issue paychecks when pay periods end.

Beyond payroll processing, pay periods are critical in budgeting, tax reporting, and workforce planning. Therefore, choosing the right cadence, such as weekly, biweekly, or semi-monthly, affects an organization’s entire payroll system, from cash flow and administrative efficiency to employee expectations and overall satisfaction.

Thus, many employers rely on payroll software or a payroll service provider to efficiently manage this process—automating pay schedules, calculating wages, and using built-in tools like a customized pay period calculator to ensure accuracy across each cycle.

What is the Meaning of Pay Schedule?

A pay schedule is the calendar an employer follows to determine when employees get paid based on the chosen payment period and corresponding dates throughout the year.

For example, if a company uses a semi-monthly pay schedule, employees might work during the pay period of August 1–15 and then receive their paycheck on August 20. In this case, August 1–15 is the pay period, and August 20 is the pay date defined by the pay schedule.

In other words, payment periods track when work is done, and pay schedules track when that work is paid.

Is a Payment Period the Same as a Workweek?

While the concepts of a payment period and workweek overlap, they serve distinct purposes and follow different rules. The key difference is that a workweek is used for wage and hour compliance, while payment periods determine when employees are paid.

A workweek is seven consecutive 24-hour days used to determine when an employee reaches 40 hours of work, often for calculating overtime pay. Under the Fair Labor Standards Act (FLSA), a workweek can begin on any day and at any hour the employer chooses, and it doesn’t need to match a traditional calendar week. Employers can even set different workweeks for different groups of employees, offering flexibility based on business needs.

A payment period, on the other hand, refers to the set timeframe an employer uses to track and calculate employee earnings for payroll. Depending on the pay schedule, a single payment period may span multiple workweeks or only portions of one.