How to Choose the Right Payroll Schedule for Your Small Business

For small business owners in Arizona, payroll isn’t just a task—it’s a core part of running a smooth, compliant and efficient operation. One of the most important payroll decisions you’ll face is how often to pay your employees: weekly, biweekly, semimonthly or monthly.

Each option comes with unique benefits and challenges. Choosing the right one means balancing employee satisfaction, cash flow, administrative burden and long-term scalability.

Weekly Payroll

This approach pays employees once every week—52 times a year. It’s a popular choice in industries like construction, hospitality and retail where workers are paid hourly.

Pros:

• Employees often appreciate getting paid every week. It’s easier for them to manage bills and unexpected expenses, which can improve morale and retention.
  
  
• Since time is often tracked weekly, it’s easier to reconcile timecards and calculate overtime.
  
  
• Weekly payroll is especially attractive in competitive labor markets and can help you stand out to new hires.

Cons:

• More frequent pay runs mean more administrative work and higher processing costs.
  
  
• Your business must be prepared to have enough cash available every week.
  
  
• If you use a third-party payroll provider, each run typically has a fee—so this approach may cost more than longer pay periods.

Best for: Hourly teams, seasonal workers and businesses trying to attract and retain talent in labor-intensive roles.

Biweekly Payroll

Paying employees every two weeks means 26 pay periods a year. It’s a widely used option that offers a balance between weekly and monthly payroll.

Pros:

• It’s familiar to most employees and still feels consistent and frequent.
  
  
• Works well for both hourly and salaried staff.
  
  
• Reduces the number of pay runs compared to weekly payroll, saving time and money.

Cons:

• Because 52 weeks don’t divide evenly into 12 months, you’ll have two months with three payrolls instead of two. That can throw off monthly budgeting if you’re not prepared.
  
  
• It doesn’t align neatly with calendar months, making monthly accounting and financial reporting a little more complicated.

Best for: Businesses with a mix of hourly and salaried staff that want to keep employees happy without processing payroll every week.

Semimonthly Payroll

This schedule pays employees twice a month—typically on the 1st and 15th or the 15th and last day of the month—for a total of 24 pay periods annually.

Pros:

• It aligns neatly with monthly accounting cycles and is easy to manage from a budgeting standpoint.
  
  
• It requires fewer payroll runs than weekly or biweekly, which can lower costs.
  
  
• A good fit for salaried workers, since it splits annual salary evenly into two predictable monthly payments.

Cons:

• Pay dates fall on different weekdays each month. If payday lands on a weekend or holiday, you’ll need to adjust.
  
  
• Not ideal for hourly workers. Because the pay period may split weeks, calculating time and overtime can be more complex.

Best for: Companies with salaried employees that want a consistent payroll system and simplified bookkeeping.

Monthly Payroll

With this setup, employees are paid once per month—just 12 times a year. It’s the most efficient from a processing standpoint but often the least preferred by employees.

Pros:

• Fewer payroll runs means less time and money spent on processing.
  
  
• Simplifies your business’s budgeting and cash flow planning.
  
  
• May work for salaried employees who have predictable income needs.

Cons:

• Not well-suited to hourly workers or employees living paycheck to paycheck.
  
  
• Some employees may feel financial strain between paydays, which can affect morale.
  
  
• Monthly payroll isn’t allowed in Arizona for most hourly workers due to wage payment laws requiring at least two paydays per month.

Best for: Businesses with only salaried employees and consistent income streams looking to streamline payroll.

Arizona-Specific Considerations

In Arizona, employers are required to pay employees at least twice per month. That makes monthly payroll unsuitable for most hourly workers unless they meet federal exemption criteria.

If your Arizona-based business employs people in other states, be sure to comply with those states’ wage laws too. Multi-state compliance can get tricky, which is why working with a reliable accounting partner is key.

Making the Right Choice

To choose the best payroll schedule for your small business, consider the following:

• Are your employees hourly, salaried or both?
• How often do you want to handle payroll admin tasks?
• Do you have a payroll company and how much do they charge for processing?
• What’s your current and projected cash flow situation?
• Do you need to comply with multiple states’ payroll laws?
• What payroll frequency would your employees prefer?

Your decision will impact employee satisfaction, accounting workflows and even recruiting. Choose a schedule that aligns with your business’s structure today but can also scale with you as you grow.

Need Help With Payroll in Phoenix?

Whether you’re just starting your business or reevaluating your current process, H&H Accounting can help. From choosing the best payroll schedule to ensuring compliance and streamlining processing, we’re your trusted Arizona-based accounting team.

Contact us at H&H Accounting Services today through our website or give us a call at (480) 561-5805 and let’s build a payroll system that works for you and your employees.