Which pay frequency is best for employee retention?

November 25, 2025

Sara Maginn Pacella

Employee retention is a top priority for many organizations, and pay frequency is one key aspect of employment that impacts employee retention and satisfaction.

An often-overlooked aspect of payroll is evaluating and determining how frequently you will pay employees to ensure the pay cycle meets the needs of your staff and complies with payroll laws. Canadian employers typically pay their staff on a weekly, biweekly, semi-monthly or monthly basis. Many factors can influence pay frequency decisions, including payroll staff time, organizational cash flow, provincial regulations and employee retention.

HCM Podcast

Produced with Google Notebook LM Using AI Narration

The impact of pay frequency

Predictable, reliable pay is important to all employees. Salaried employees generally have more predictable paycheque amounts, whereas temporary, hourly and seasonal employees may experience a greater fluctuation in the amounts they receive each pay period.

HR Reporter shared that, “Two-thirds of full- and part-time employees are paid every two weeks, while 20 per cent are paid weekly, found Ceridian. However, 40 per cent say they would prefer to be paid weekly.”

A recent Wages & Wellbeing study surveyed more than 1,000 American workers and revealed that 77 per cent of employees would take on extra shifts and work harder in an environment that provided more frequent access to their pay.

Payroll’s impact on the job

The National Payroll Institute’s (NPI) 2025 Annual Survey of Working Canadians revealed that “over half of all workers (51 per cent) admit to spending at least 15 minutes per day thinking about their finances on the job.” Further, “Nearly one in four admits that stress related to personal finances has impacted their workplace performance.” NPI also estimates that the result of this distraction amounts to $69.5 billion in annual lost productivity.

” It is critical for employees to know when their money is going to arrive. Pay frequency means nothing if it isn’t reliable. ”

Exploring salary and hourly payment frequency

Weekly payments: When employees are paid once a week, or every seven days

Pros

High frequency of pay can help people manage their budgets because payments are coming in often.
Excellent pay option for workplaces with many part-time, temporary, hourly or seasonal workers as it offers employees their payments shortly after they have completed their service.
Payroll errors can be corrected quickly.
Employers can adhere to applicable overtime labour laws ensuring employees receive their overtime pay swiftly.*
Increased morale.

Cons

Increased administrative costs to process payroll 52 times per year.
Possible increase in errors, particularly in areas such as paid time off, garnishments, etc.
Could create cash-flow management pressures for the business, particularly for small to medium-sized businesses.

Biweekly payments: When employees are paid every 14 days, or 26 times per year

Pros

Provides a balance of pay frequency for employees while reducing administrative costs, errors and burdens on staff compared to weekly payroll.
This is a common choice for payroll frequency in Canada and a practical choice for salaried and hourly employees.
More pay days, with two months of the year offering “bonus” pay days with three payments in one month.
Relatively fast turnaround and calculation for overtime payments.*

Cons

Could cause budgeting challenges for people who are living paycheque to paycheque.
Managing staffing time and hours for the two months each year that have three pay periods could pose a challenge.
Benefit deductions may be more complex for biweekly pay frequencies.

Semi-monthly payments: When employees are paid twice a month, usually once in the middle and once on the last day of the month.

Pros

Since payments are received on the same days of each month, it may be easier for employees to manage their personal budgets and autopayments coming out of their bank accounts.
This choice provides a balance between pay frequency for employees and reduced cost reduction and administrative burden for the employer.
Maintains provincial legal requirements for pay frequency for all provinces and territories.
Simplified deduction management.
Consistent, larger paycheques (compared to weekly and biweekly payments).

Cons

Could cause budgeting challenges for people who are living paycheque to paycheque.
Can complicate overtime payroll calculations.*

Monthly payments: Monthly payments are less common – employees are paid on the same day each month, usually at the end of the month

Pros

There are only 12 payroll runs each year, which reduces administrative burden, staff time and cost.
May align with tax deadlines.
Less chance of errors.

Cons

Does not meet provincial payroll frequency requirements for many provinces, including all employees in British Columbia, Manitoba, New Brunswick, PEI, Nova Scotia, Newfoundland and Labrador, Quebec (with the exception of some executives), and Yukon, and hourly employees in Saskatchewan.
Could cause budgeting challenges for people who are living paycheque to paycheque.
Can be difficult to manage overtime* and hourly, part-time and temporary employees’ pay.

The right payroll frequency for your workplace

There is no such thing as the “best” payroll frequency. It all depends on balancing business goals, administrative costs and the needs of the employees. Little things can go a long way in terms of overall employee satisfaction, and in the workplace, that includes pay frequency.

Organizations looking to explore their pay cycle options should survey employees on their preferences and examine the costs associated with adjusting pay frequency.

Pay reliability key to employee satisfaction

In addition to the impact of pay frequency is the profound importance of payroll reliability. It is critical for employees to know when their money is going to arrive. Pay frequency means nothing if it isn’t reliable.

Communicating payroll change

Before making a change, employers must maintain transparent communication with their team, ensure compliance with local payroll frequency regulations and update any applicable employment contracts accordingly.

Regular communication and assessment of employee needs, along with transparency in processes, will demonstrate the importance of their voice and help improve employee satisfaction, regardless of pay frequency.

*In Canada overtime pay is calculated using a seven-day work week. This simplifies overtime calculations for weekly and biweekly payment schedules and makes them more complex for semi-monthly and monthly payment schedules because the number of work weeks in each pay period differs.

What are your thoughts on