{"id":283,"date":"2019-03-07T04:37:09","date_gmt":"2019-03-07T09:37:09","guid":{"rendered":"https:\/\/www.stubcheck.com\/blog\/?p=283"},"modified":"2020-01-26T22:24:41","modified_gmt":"2020-01-27T03:24:41","slug":"employee-payday-pay-cycle-and-pay-period-understand-the-difference","status":"publish","type":"post","link":"https:\/\/www.stubcheck.com\/blog\/employee-payday-pay-cycle-and-pay-period-understand-the-difference\/","title":{"rendered":"

Employee Payday, Pay Cycle and Pay Period – Understand The Difference<\/h1>"},"content":{"rendered":"\n


<\/p>\n\n\n\n

Payday, pay cycle<\/a> and pay period are three commonly used terms in\nbusiness payroll. Whether you are an employer or an employee, it is imperative\nthat you understand the meaning of these terms. After all, they pertain to your\npayment, and when it comes to money, it\u2019s always best to be as accurate as\npossible. <\/p>\n\n\n\n

Some people make the mistake of using these terms interchangeably.\nBut they actually mean very different things. Let\u2019s understand them in detail.<\/p>\n\n\n\n

Payday<\/strong><\/p>\n\n\n\n

As the name suggests, this refers to the day on which an employee\nis paid his wages. This is the date mentioned on an employee\u2019s monthly\npaycheck<\/a>. It is also known as the Paycheck Date.<\/p>\n\n\n\n

The payday is an important detail required while filing your\nincome taxes. <\/p>\n\n\n\n

Pay Cycle<\/strong><\/p>\n\n\n\n

The pay cycle refers to how often or the frequency at which an\nemployee gets paid. This is predefined by a company for its employees and\ndepends on the company\u2019s structure, requirements and convenience. Different\nemployees in a company may have different pay cycles as long as this has been\nagreed upon by both parties. For example, an employee\u2019s pay cycle can be\nweekly, bi-weekly or monthly.<\/p>\n\n\n\n

The pay cycle is not directly related to your taxes. You don\u2019t\nhave to mention the pay cycle in your tax returns.<\/p>\n\n\n\n

Pay Period<\/strong><\/p>\n\n\n\n

A pay period<\/a> refers to the time period over which an employee\nworked for the company in order to get his paycheck. <\/p>\n\n\n\n

Let\u2019s take an example. Suppose an employee worked for a company\nfrom May 1-31 and got a paycheck on June 1. Then, his payday is June 1. His pay\nperiod is May 1-31. His pay cycle is monthly.<\/p>\n\n\n\n

Which of These is Important for Payroll and Taxes?<\/a><\/strong><\/p>\n\n\n\n

It can be a bit confusing to meddle with so many different fields\nof financial data. However, the only important data from a payroll and tax\nperspective is the Payday \/ Paycheck Date. This date determines the deadline\nfor payroll tax deposits to the Internal Revenue Service (IRS). The Pay Cycle\nand Pay Period don\u2019t have a direct impact on the deadlines for payroll tax deposits<\/a><\/strong>.<\/p>\n\n\n\n

There are two deposit schedules to the IRS \u2013 monthly and semi-weekly. If you are a business-owner, you need to determine your deposit schedule at the beginning of the calendar year (based on your total tax liability reported). After that, you\u2019ll need to adhere to the deposit deadlines based on the payday for your employees. <\/p>\n\n\n\n