Expert: Shirley McAllister, CPP, PHR - 8/6/2010

Question
QUESTION: What are the best practices for Payroll frequencies in Canada. Any legislative requirements that need to be considered?

ANSWER: Weekly, Bi-Weekly, Semi-Monthly and Monthly are the most used payroll frequencies.

Of those frequencies the Bi-weekly and Semi-monthly are more widely used throughout Canada.

Weekly would be used more in agricultural, farm work, and sometimes in manufacturing plants.

Bi-weekly is however the best way to pay hourly employees and the most cost effective. It is every other week 26 times a year.

Semi-Monthly works very well with exempt employees and can be used with hourly. If paying hourly semi-monthly the overtime is a bit harder to figure. Semi-monthly is on set days of the month such as the 1st and the 15th and is 24 pay times a year.

Monthly is used a lot in Schools and Government and State agencies as well as some non profit agencies. It is a monthly salary once a month or 12 times a year. This is often times harder for the employee to manage and in some instances it is not legal to pay monthly.

Shirley

---------- FOLLOW-UP ----------

QUESTION: Is this response for Canadian Payroll? As you refer to Exempt status which is FLSA under US?
This question is around Canada and what legislation should I be aware of around needs and best practices for pay frequencies in Canada, like we have FLSA in US.

Answer
Canadian Law on pay frequencies is very similar to U.S. They have all the same pay frequencies.

They do not use a 40 hour week but instead use an 8 hour day to figure overtime.

Holidays and vacation are figured differently.

Pay periods are still weekly, bi weekly, semi monthly and monthly.

In our two offices in Canada we pay bi weekly, in the past we paid semi monthly.

In UK it is mostly monthly pay.

Shirley