Payday refers to the specific day on which an employer pays their employees for the work they’ve performed during a certain pay period. This can be weekly, bi-weekly, semi-monthly, or monthly, depending on the company’s pay schedule.
For instance, a company might have a policy of paying its employees every other Friday, in which case that Friday would be referred to as payday. On payday, employees receive their pay either through a physical paycheck, a direct deposit into their bank account, or onto a payroll card.
Pay schedules can vary widely by employer and sometimes by state law. Some industries, like restaurants for instance, may pay out tips daily but provide a formal paycheck bi-weekly. It’s always important for employees to understand their employer’s pay schedule.
Example of Payday
Let’s assume that a company has a bi-weekly pay schedule, which means that it pays its employees every two weeks, or 26 times per year.
The company might designate every other Friday as payday. So, if the first payday of the year is on Friday, January 6th, the employees would receive their pay for the two weeks (or 80 hours for full-time employees) that ended on the preceding Sunday, which would be January 1st.
Then, the next payday would be two weeks later on Friday, January 20th, covering the two-week period ending on Sunday, January 15th, and so on throughout the year.
On each payday, the employees would receive their pay, typically via direct deposit into their bank account, a physical paycheck, or onto a payroll card, depending on the company’s pay practices.
It’s also important to note that the exact timing of paydays can vary depending on holidays and weekends. Some employers may pay their employees the day before the holiday if payday falls on a holiday, while others might pay the next business day.