Pay date vs pay period
While often confused, pay date and pay period are distinct concepts in payroll. Understanding the difference is essential for setting up efficient payroll processes.
Pay period
- Timeframe for work being paid
- e.g., Monday to Sunday
- When hours are worked
- Basis for calculations
Pay date
- Day payment is made
- e.g., Thursday following period
- When money hits account
- Fixed day each cycle
For example, a pay period might run from Monday to Sunday, with the pay date being the Thursday of the following week. This gap allows time for timesheet approval and payroll processing.
Setting consistent pay dates
Consistent, predictable pay dates benefit both employers and employees. When establishing pay dates, consider:
Pay date considerations
Many businesses choose mid-week pay dates (Wednesday or Thursday) to avoid weekend banking delays and ensure funds are available before the weekend.
Pay date requirements under Fair Work
The Fair Work Act requires employees to be paid at least monthly. Most Modern Awards specify more frequent payment:
- Weekly awards: Pay date must be within 7 days of period end
- Fortnightly awards: Pay date must be within 14 days of period end
- Monthly (NES minimum): Pay date must be within one month
Paying on time
Consistently missing pay dates can result in Fair Work complaints and damage employee trust. Build buffer time into your payroll process to ensure you never miss a pay date. If issues arise, communicate proactively with employees—late pay without notice is worse than communicating a delay.
Managing pay dates effectively
Best practices
- Document clearly: State pay dates in contracts
- Communicate changes: Give advance notice
- Plan for holidays: Pay early, not late
- Automate reminders: Timesheet deadlines
Timesheet workflow
- Set cut-off for timesheet submission
- Allow time for manager approval
- Process payroll with buffer time
- Schedule bank transfer 1-2 days ahead
Common pay date mistakes
Inconsistent pay dates
Changing pay dates frequently or unpredictably makes it hard for employees to budget and plan. Establish and maintain consistent dates.
Not planning for public holidays
If pay date falls on a public holiday, plan to pay on the preceding business day. Paying late because of a holiday is still late payment.
Insufficient processing time
Setting pay dates too close to period end doesn't leave time for timesheet approval and corrections. Build in adequate buffer time.
Not communicating clearly
Employees should know exactly when to expect payment. Include pay date information in onboarding and keep it readily accessible.
Key takeaways
The pay date is when employees actually receive their wages, typically a few days after the pay period ends. Under Fair Work, employees must be paid at least monthly, though many awards require weekly or fortnightly payment. Consistent, predictable pay dates are essential for employee satisfaction and compliance.
Efficient timesheet workflows help ensure pay dates are met consistently. RosterElf's time and attendance system includes approval workflows that ensure hours are verified and ready for payroll export well before your pay date deadline.
