Pay period options in Australia
Australian employers can choose from several pay period frequencies, each with its own advantages for different business types and workforce compositions. The choice affects payroll processing, employee cash flow, and administrative workload.
Weekly
- 52 pay runs per year
- Best for hourly workers
- Higher admin workload
- Faster employee cash flow
Fortnightly
- 26 pay runs per year
- Most common in Australia
- Balanced workload
- Regular employee income
Monthly
- 12 pay runs per year
- Common for salaried staff
- Lowest admin workload
- Employees wait longer for pay
The choice of pay period should consider your workforce type, industry award requirements, and administrative capacity. Many businesses with mixed workforces use different pay periods for different employee groups.
Fair Work requirements for pay periods
While the Fair Work Act sets the minimum standard of monthly payment, specific Modern Awards often require more frequent payment:
Award payment frequency requirements
Always check your specific Modern Award for payment frequency requirements. Paying less frequently than the award specifies is a compliance breach.
Choosing the right pay period
Consider these factors when selecting a pay period for your business:
- Award requirements: The applicable Modern Award may mandate specific frequencies
- Workforce type: Hourly/casual workers often prefer more frequent pay; salaried staff may accept monthly
- Cash flow: More frequent payments require better cash flow management
- Administrative capacity: Smaller teams may prefer less frequent payroll runs
- Payroll costs: Some payroll providers charge per pay run
Timesheet cut-off timing
Most businesses need 2-3 days between the end of a pay period and the pay date to process timesheets, calculate pay, and run payroll. Consider your processing time when setting pay period end dates and pay dates. For example, a pay period ending Sunday might have a Thursday pay date.
Pay period and payroll calculations
What's calculated each pay period
- Hours worked: Ordinary, overtime, penalty rates
- Gross pay: Total earnings before deductions
- PAYG tax: Using pay period-specific tables
- Leave accruals: Accumulated for the period
Aligning rosters with pay periods
- Roster cycles should match pay periods
- Consistent start/end days simplify processing
- Timesheet approval workflows need clear deadlines
- Software integration ensures accurate data transfer
Common pay period mistakes
Paying less frequently than award requires
If your award requires weekly or fortnightly pay, you can't switch to monthly. Always check award requirements before setting pay frequencies.
Misaligned roster and pay periods
When roster weeks don't match pay periods, splitting shifts across periods becomes complex. Align roster cycles with pay periods for simpler processing.
Using wrong tax tables
Each pay period frequency has specific ATO tax tables. Using weekly tables for fortnightly pay results in incorrect PAYG withholding.
Insufficient processing time
Not allowing enough time between pay period end and pay date leads to rushed processing and errors. Build in adequate review time.
Key takeaways
A pay period is the recurring timeframe for calculating employee wages, typically weekly, fortnightly, or monthly in Australia. While Fair Work requires at least monthly payment, many Modern Awards mandate more frequent pay cycles. Choose a pay period that meets award requirements and suits your business operations.
Aligning roster cycles with pay periods simplifies timesheet processing and reduces errors. RosterElf helps you manage rosters that match your pay cycle and exports accurate timesheets for each pay period directly to your payroll software.
