Are three-payday months kicking your ass?

As a business or organization that is currently on the bi-weekly payroll schedule, it can be tricky to budget or plan for cash flow during the two 3-payday months each year. For many of you December is one of those months. That means 3 payrolls this month and a larger tax bill next month because of it.

The last 3-payday month hit hard for me and I decided to move my payroll schedule to twice a month, rather than bi-weekly because of it. Now my employees get paid on the 5th and 20th each month, my payroll and taxes are pretty stable and consistent and my cash flow is not as drastically affected. It has been a huge help for me.

I made the change over 2 months by first checking in with my employees, planning the transition for the time when it would be the least disruptive to their personal budgets and made the switch with a lot of notice. Some employees really like the idea of the 3-payday month, but their own budgeting can be more consistent with a twice a month schedule as well.

If you are interested in exploring this option for your employees, let me know and we can talk through a good timing and process to make this transition in 2023.