{"id":292,"date":"2020-01-26T22:26:13","date_gmt":"2020-01-27T03:26:13","guid":{"rendered":"https:\/\/www.stubcheck.com\/blog\/?p=292"},"modified":"2020-05-08T12:52:21","modified_gmt":"2020-05-08T16:52:21","slug":"difference-employee-payday-pay-cycle-pay-period","status":"publish","type":"post","link":"https:\/\/www.stubcheck.com\/blog\/difference-employee-payday-pay-cycle-pay-period\/","title":{"rendered":"

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

Employee Payday, Pay Cycle and Pay Period – Understand The Difference<\/strong><\/p>\r\n\r\n\r\n\r\n

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

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

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

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

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

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

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

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

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

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

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

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

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