How to Survive Changing Your Pay Cycle | Blog | PaySauce

How to Survive Changing Your Pay Cycle

by Laura Marwick

Everybody loves payday!

Except anybody who deals with payroll. For employers, it might be cheaper and simpler to pay less often - fortnightly or even monthly. But most employees prefer being paid weekly, keeping the bank account nice and healthy. Your people may be depending on a frequent paycheck to stay out of debt. It’s a tricky one. Here’s how to handle it.

  1. Give notice. Nobody likes getting the rug yanked out from under them. If you give your people time to adjust, they can take steps to start budgeting for a longer pay cycle. Plus, you actually have a legal obligation to give ‘reasonable’ notice of the change.

  2. Be honest. It’s always a lot easier to accept changes when you know why they’re happening. Explain to staff that fewer pay runs mean less admin and increased efficiency, and offer to help them through the change with budgeting advice and regular reminders. You can’t just push this through: MBIE says that an employer actually has to get an employee’s consent in writing to change their payday or pay period.

  3. Find a solution. Use a provider (like PaySauce!) that lets your staff access their pay early with "Pay Advance". Pay Advance allows employees to access the money they’ve already earned, whenever they need to. It means your people don’t end up taking a loan from a payday lender with exorbitant interest rates, or even a loan shark. If your people are having a tough time juggling their finances, check out Pay Advance.

  4. Look before you leap. Make sure that you’re choosing the right pay period for your business. Before you do any of the above, make sure that going monthly is actually viable. If your staff are hourly, an infrequent pay cycle might be more trouble than it’s worth. A timesheet deadline that comes around once a week is a much easier routine to stick to. Paying every two weeks might sometimes result in 3 pays within one month, and can create admin mess.

  5. Keep your word. Make sure that your employment contracts don’t promise that you’ll follow the current pay cycle. If the contract specifies that your people will be paid weekly or fortnightly, you’re stuck with it. Even if your employee agrees, you’d have to draw up a new contract.

As an employer, a longer pay period keeps your life simple, but so does happy staff. If you’re losing one to gain the other, you need to decide which is more valuable. Or take our advice, and you just might get both.

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Posted on 17 January 2019

Laura Marwick
Marketing Communications & Engagement Manager

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