How to Calculate Hours Worked, Pay Periods, and More
When it comes to job satisfaction, pay and benefits matter most, according to BambooHR research. That’s why accurate paychecks and knowing how to calculate hours worked aren’t just payroll essentials—they’re people priorities.
Pay periods play a critical role in this process. They help employees budget with confidence and enable HR teams to track key insights like labor costs and overtime. A well-run payroll process also means fewer costly errors, less stress, and fewer interruptions for your team.
Still, managing payroll can feel overwhelming. Between tax deductions, multiple pay schedules, and changing compliance requirements, it’s easy to get stuck in the weeds. That’s where BambooHR® Payroll can help. It streamlines your workflow, keeps you compliant, and helps deliver a smooth, reliable experience, so you and your employees can breathe easy on payday.
What is a pay period?
A pay period is a regularly scheduled period of time that establishes when employees get paid. It also defines the timeframe during which employee work hours are tracked and recorded. Having regular pay periods establishes a set schedule so employees know when they can expect their next paycheck and check any payroll deductions.
Pay periods typically follow a set schedule, with the most common types being weekly, bi-weekly, semi-monthly, and monthly. How employers break up their pay periods depends on what works best for them and for their industry. Many employers choose to set up a payroll calendar. This can be highly useful when navigating employee paychecks which follow several different pay periods.
How many pay periods are in a year?
The number of pay periods in a year depends on how frequently you pay your employees. Depending on your organization, the employee contract, and the state, employers must follow some specific payday requirements.
Below, we break down the most common pay schedules along with the most common advantages and tradeoffs of each to help you decide what works best for your team.
Weekly pay period
Paying employees weekly results in 52 pay periods per year. While salaried employees are rarely paid weekly, this schedule is common in trades and hourly roles because it offers predictable cash flow and more immediately reflects fluctuations in hours worked.
- Easier for employees to budget
- More paydays for employees
- More frequent payroll processing can increase costs
- Managers spend more time reviewing payroll
Bi-weekly pay periods
Bi-weekly pay periods occur every other week, resulting in 26 pay periods per year. Ocassionally, leap years create a 27th payday. This schedule typically covers 80 hours for full-time employees and is common for both salaried and hourly employees.
- Employees receive frequent paychecks
Additional time for managers to review pay period hours
- Less time and money required for payroll processing
- Pay period reporting can be tricky when pay periods extend beyond the end of the month or year
- Additional paychecks due to leap years can cause complications in factoring employee annual pay, taxes, and employer contributions
Semi-monthly pay period
Semi-monthly pay periods usually go from the first through the fifteenth of the month and from the sixteenth through the end of the month, totaling 24 pay periods per year. Semi-monthly pay periods are most common for salaried employees.
- Pay periods stay within the same month
- More predictable payroll costs
- No leap-year complications
- Overtime calculations can be more complex
- Paydays don’t always fall on the same day of the week
- Workweeks and pay cycles may not align
Monthly pay period
Monthly pay periods result in 12 paychecks per year. While this approach reduces payroll costs, it can be more difficult for employees, who have to wait longer between paychecks. This type of pay schedule is most often used for for salaried roles, freelancers, contractors, and consultants who invoice monthly.
- Works well for contract-based work
- Simplifies payroll and accounting
- Saves time and money for HR and finance teams
- Not ideal for hourly workers
- Federal holidays may require adjusted pay dates
- Paydays don’t always fall on the same day of the week
What is the most common pay period for employees?
According to the US Bureau of Labor Statistics, bi-weekly pay periods are the most common, with over 40% of employers using this schedule. Weekly pay periods are the second most popular scheule, with 27% of employers opting for weekly payroll. While employers prefer fewer payroll runs to reduce administrative costs, employees often prefer weekly or bi-weekly pay for greater financial flexibility.
Pay period FAQs
From knowing how many bi-weekly pay periods are in a year to understanding the difference between the pay periods, we’ve answered the top questions surrounding this complicated topic.
What is the difference between bi-weekly and semi-monthly payrolls?
The key difference between bi-weekly and semi-monthly pay periods lies in how often paydays occur. Biweekly payroll runs every other week, and semi-monthly pay is paid out on two set dates each month.
Other significant differences include the following:
- Employees are paid on a specific day (e.g., every other Friday)
- Pay is every two weeks
- Overtime is easier to calculate
- The cost of payroll is potentially higher and bookkeeping may be more complicated because of additional pay periods
- Employees are paid on specific dates (e.g., January 1, January 15, etc)
- Pay is twice per month
- Overtime may be more complicated to compute if extra hours fall between different semi-monthly pay periods
How many bi-weekly pay periods are there in a year?
Bi-weekly pay periods result in 26 pay periods within a year. However, during leap years there may be 27 pay periods.
What does FLSA “hours worked” mean?
Under the Fair Labor Standards Act (FLSA), “hours worked” refers to the amount of time an employee spends performing job-related activities for which they earn pay. Non-exempt employees must be paid at least the minimum wage for both required and permitted work.
Required work could refer to a standard 9-5 shift. On the other hand, permitted work is any job-related activity that was not requested by an employer but allowed to be performed. For example, an employee voluntarily finishing up a project beyond the end of their shift with permission from their employer may constitute as permitted, payable work time that counts towards hours worked.
While many companies offer paid time off (for sickness, vacation, or personal time) to attract and retain top talent, that time does not count as FLSA hours worked.
How many hours can you legally work in a day?
The FLSA doesn't limit the number of labor hours per day for employees aged 16 and older. However, non-exempt employees working more than 40 hours in a week are entitled to overtime pay. Employee overtime hours are calculated at a pay rate that’s 1.5 times regular hourly rate (or time and a half) for all hours worked beyond the week’s 40-hour threshold.
What is a retro pay period?
A retro pay period covers past work time for which an employee was underpaid. Retro pay is often used to correct payroll errors or apply compensation changes, such as raises, and is typically issued in the next payroll run.
What type of pay period should I use?
The type of pay period to use depends on your business needs, employee preferences, and applicable state laws. Explore compensation trends and employee expectations thoroughly as part of your decisionmaking process. If you’re unsure which schedule fits best, consulting a certified payroll professional or accountant can make you