Monthly pay

carl310166

My employer is thinking about changing over from weekly to monthly pay.

My co-workers and myself were having a discussion about this,but how does the company save money?

The first thing that sprung to mind was the interest accrued.

Is there anybody with payroll experience on the forum?

Would the weekly overtime be input once a month,so payroll staff would only work 1 week in 4 ?

Thanks in advance.

rrwfotr

Hi one thing that spring to mind is what happens to the 4 extra weeks in the year that will be missed if you get based on a monthly salary basis? Also he saves money as he/she will only have to do 12 monthly payrolls whereas weekly he has to do 52 payrolls a year. This could save him/her a hell of allot admin and also banking /bacs charges etc plus the interest on the combined wages per month. Also the company goes bankrupt they could stich you up 4 weeks wages.

carl310166

Thanks.

What we wanted to know was,how do they save on major costs by doing 12 payrolls instead of 52,do they reduce the mumber of staff drastically? because the same number of overtime dockets will go in every week,and there will be thousands.

By the way,the company is a massive organization.

rrwfotr

They may reduce numbers as the number of people processing accounting information would be less as they would have a larger window of payment. It goes without saying that on a weekly basics there would be a masstive pressure to get the wages out every week, week on week. However doing monthly, this would reduce the pressure on the company massively , also they would save allot of cash with on banking / admin fees.

Pink.

carl,

If you work for a large organisation, then they will obviously save in administration and processing costs by paying salaries monthly. It will certainly make life easier for the people who process wages as they will only have one major deadline per month as opposed to 4/5.

Something else worth considering.............when a company changes an employee's terms and conditions of employment, it is normal practice that they should offer some form of compensation. At the very least they should offer interest free loans to employees who might have difficulty coping with the transition from weekly to monthly payment.

I don't think companies are obliged to offer compensation, but it is common practice.

Pink

Poppy9

When I started work their were still some white collar staff on 2 weekly pay. They were offered a small loan to go onto 4 weekly pay. A couple of years later they decided to move onto monthly pay. We were all issued with new contract of employment. If we didn't sign we were sacked. The unison Nalgo told us to just sign as it was unreasonable for us not to.

Monthly pay will help cashflow drastically and will reduce the number of staff. Not all of these will be payroll staff - it depends on the size of business. If a separate section undertakes bank rec and payment runs then obviously there job will reduce. Payroll staff will reduce by some level simply by not needing so much 'spare capacity' to cover short term sick because as has been mentioned there is only 12 deadlines pe year not 52. Also won't need staff cover over Xmas and othe holidays to get payroll out. If you currently get regular overtime I think you can kiss goodbye to this

carl310166

Thanks both.

jockettuk

and on monthly there should be less chance of mistakes but if there is one you have to wait a month for it to appear in your wages..

Nile

Be aware of their deadline date for processing overtime payments too. For example, if your pay day is the 26th of every month.........the deadline may be the 14th of every month. So, if you do overtime on say the 15th, you won't get paid during the current month and will have to wait for the following month for payment.

Also, make sure that any standing orders or direct debits take account of the monthly salary payment.......you don't want to be plunged into the red.

Big_Nige

Not only will the company save money by paying wages monthly as they keep the money in the bank longer, if you work public holidays ie Christmas then you will be paid before christmas eg 19 December. When you claim your payment for xmas day etc you will not submit that claim till January for payment in February.. Result you wait 2 months for public holiday payment.