Pay Dates vs. Pay Periods

Knowing when wages earned should be reported and paid can be a tricky topic. In this blog, we explain the difference between pay dates and pay periods for your employees.

The difference between pay dates & pay periods

First, it's important to decipher these two payroll terms: 1) pay dates and 2) pay periods. A pay date, also known as pay day, is the date on which employees are paid and checks are distributed. The paycheck date is used to determine when payroll liabilities are due, based on deposit schedules. Pay periods are the beginning and ending dates that represent the period in which employees worked or earned wages.

For a more detailed example, please refer to the calendar above. Let's say your biweekly pay period is December 21, 2014, to January 3, 2015. If your pay date is in January 2015, the wages should be reported in 2015. If your pay date is in December 2014, your wages should be reported in 2014.

Questions often arise at the end of the calendar year, or at the beginning of a new year, about the year in which the wages should be reported. IRS rules are based on pay date, not pay period, so any wages paid in January will be included in the new calendar year wages for tax deposit and reporting purposes, including annual W-2 forms.

It is important to plan accordingly for last-minute payments you may be paying out in December (for example, if your employees want to work overtime for extra holiday cash). It can take up to 72 hours to process and guarantee direct deposits. Your myPay Solutions payroll specialist can help if you have any further questions.

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