A pay period is the recurring schedule that determines when employees earn wages and receive their paychecks, whether that’s weekly, bi-weekly, semi-monthly, or monthly. In the Philippines, the Labor Code requires employers to pay workers at least twice a month, with no more than 16 days between paydays. Picking the wrong schedule can lead to overtime miscalculations, cash flow strain, or compliance headaches with BIR and DOLE.
Here’s a breakdown of how each type works, what Philippine law says, and how to choose the right one for your team.
Key Takeaways
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What is a Pay Period?
A pay period is the set timeframe during which your employees work and earn their wages. At the end of each pay period, you process payroll and issue their payslips. In the Philippines, the Labor Code (Article 103) says wages must be paid at least once every two weeks or twice a month, with no more than 16 days between paydays. That rule applies to all rank-and-file employees.
How Pay Periods, Payroll Cycles, & Pay Dates Differ
Understanding these three terms helps avoid confusion in payroll processing, especially as teams grow and pay schedules become more structured.
- Pay period — the date range when your employees earn their wages. For example, January 1–15.
- Payroll cycle — how often you actually run payroll. If you pay semi-monthly, you run 24 payroll cycles per year.
- Pay date (payday) — the specific day employees receive their paycheck. This usually falls a few days after the pay period ends, to give your team time to process everything.
So if your pay period is January 1–15 and your payday is January 20, the five-day gap is your processing window. Most Philippine companies set paydays on the 15th and 30th (or last working day of the month).
Common Payroll Schedules in the Philippines
The Labor Code lets you choose from several pay schedules, as long as you pay rank-and-file employees at least twice a month. Here’s how each one works — and where it fits best.
Within the guidelines of the Philippine Labor Code, a business can choose a pay period, such as daily, weekly, bi-weekly, or monthly, and may implement multiple pay periods for different employee groups (e.g., salaried or hourly), which translates to various kinds of payslip.
1. Daily
Daily pay used to be rare in the Philippines because of the admin headache. But “earned wage access” apps have changed that; employees can now withdraw wages they’ve already earned, usually for a small per-transaction fee.
That said, daily payroll still creates heavy admin work. You’d need to handle BIR withholding calculations and government deductions every single day. It’s mostly practical for gig workers or very short-term hires.
- Pay cycles per year: up to 365.
Once established, these pay periods must remain consistent, with wages paid at least once every two weeks or twice a month at intervals not exceeding 16 days.
2. Weekly
Common in construction, retail, and food service — industries where many workers are paid daily or hourly rates. You pick a fixed day (usually Friday) and pay your team the same day each week.
Weekly pay works well with the Labor Code’s overtime and holiday pay rules since your workweek and pay period stay aligned. The downside? You’re running payroll 52 times a year, which adds up in processing costs — especially if you outsource to a payroll vendor that charges per cycle.
- Pay cycles per year: 52.
3. Bi-weekly (Every Two Weeks)
Less common in the Philippines, but some companies use it as a middle ground. You pay employees every other week on a fixed day. The catch: some months end up with three paydays instead of two, which can surprise your cash flow if you’re not planning ahead.
- Pay cycles per year: 26.
4. Semi-monthly (Most Common in PH)
This is the standard for most Philippine businesses — especially in BPO, finance, IT, and corporate offices. You pay on two fixed dates each month, typically the 15th and 30th (or last working day). If payday falls on a weekend or holiday, most companies pay on the preceding business day.
Semi-monthly schedules keep things predictable for both you and your employees. Government deductions (SSS, PhilHealth, Pag-IBIG) and withholding tax under the TRAIN Law are easier to manage on this cadence since they’re calculated monthly anyway.
One thing to watch: overtime tracking can get tricky when a workweek overlaps two pay periods. Make sure your system can handle split-period overtime calculations.
- Pay cycles per year: 24.
5. Monthly
Typically reserved for managerial or executive-level staff. The Labor Code’s twice-a-month rule applies to rank-and-file workers, but managers and those under special agreements can be paid once a month.
Monthly payroll is the easiest to administer, only 12 runs per year. But it’s not great for employees who need cash flow flexibility, and hourly overtime calculations become harder to track accurately across a full month.
- Pay cycles per year: 12.
How to Pick the Right Pay Schedule for Your Business
There’s no single “correct” pay schedule; it depends on your business. Here are the five factors that matter most:
- What the law says — The Labor Code requires at least two paydays per month for rank-and-file employees, no more than 16 days apart. Monthly pay is only allowed for managerial staff or under special written agreements. You also need to factor in 13th-month pay, holiday premiums, and DOLE overtime rules — all of which interact with your pay schedule.
- How complex your overtime is — If your team regularly logs overtime, weekly or bi-weekly schedules make the math simpler. Semi-monthly periods can split a workweek across two pay cycles, and that complicates overtime computation. For companies with many hourly workers, weekly is often the path of least resistance.
- Your cash flow pattern — Semi-monthly works well if your revenue comes in steadily. But if your business is project-based or seasonal (think construction or tourism), weekly pay might match your billing cycles better. The key question: can you consistently meet payroll on your chosen dates?
- Admin capacity and cost — More frequent payroll = more processing runs = higher admin cost. If you handle payroll in-house with a small HR team, semi-monthly keeps things manageable. Weekly payroll for 50+ employees without automated payroll software is tough to sustain.
- What your employees prefer — Workers in hourly or blue-collar roles tend to prefer weekly pay. Salaried office staff are usually fine with semi-monthly. If you’re not sure, ask — a quick anonymous survey can save you from picking a schedule that causes unnecessary friction.
Which Schedule Fits Your Business? (Decision Matrix)
| Business Type | Recommended Pay Schedule | Operational Rationale | Admin Effort |
|---|---|---|---|
| BPO & Corporate Offices (Salaried) | Semi-monthly (15th & 30th) | Standard PH practice; simplest statutory compliance | Low |
| Retail & F&B (Hourly + Salaried) | Semi-monthly or Bi-weekly | Fits mixed wage models and daily cash flow | Medium |
| Construction & Project-Based | Weekly | Matches hourly labor expectations and project billing | High |
| MSMEs (< 20 Employees) | Semi-monthly | Lower admin cost while meeting Labor Code minimums | Low |
| Seasonal Businesses | Weekly (Peak), Semi-monthly (Off-peak) | Balances retention with cash flow control | Medium |
Quick tip for MSMEs: If you have fewer than 20 employees and most are salaried, semi-monthly is almost always the right call. It’s the least admin work that still keeps you compliant.
Salary Computation Examples (₱ PHP)
Understanding these can help businesses manage payroll efficiently and ensure employees are paid on time. Let’s put the numbers together with two common scenarios.
1. Example 1 — Salaried Employee (₱480,000/year)
Assume a salaried employee earning ₱40,000/month, before taxes and deductions:
| Pay Schedule | Amount per Paycheck | Paychecks per Year |
|---|---|---|
| Weekly | ₱9,231 | 52 |
| Bi-weekly | ₱18,462 | 26 |
| Semi-monthly | ₱20,000 | 24 |
| Monthly | ₱40,000 | 12 |
The gross amount doesn’t change — you’re just slicing it differently. What does change is how often you need to compute and remit SSS, PhilHealth, Pag-IBIG, and BIR withholding tax.
2. Example 2 — Hourly Employee (₱250/hour)
Now take an hourly worker earning ₱250/hour with 25% overtime premium (₱312.50/hour for work beyond 8 hours on a regular day):
- Week 1: 40 regular hours (₱10,000) + 2 OT hours (₱625) = ₱10,625
- Week 2: 38 regular hours (₱9,500), no overtime = ₱9,500
- Bi-weekly total: ₱10,625 + ₱9,500 = ₱20,125
Keep in mind: overtime rates go higher on rest days (30% premium) and holidays. Check DOLE’s official rate schedule for the full breakdown.
Payroll Mistakes Philippine Employers Should Watch Out For
Getting payroll right matters. Here are three mistakes that trip up a lot of businesses:
1. Misscalculating Overtime
This is the most common one. Overtime in the Philippines isn’t a flat rate — it’s 25% extra on regular days, 30% on rest days, and even higher on holidays. If your pay schedule splits a workweek across two periods (which happens with semi-monthly pay), you can easily miss hours. One shorted paycheck might not seem like a big deal, but DOLE can order back wages if an employee files a complaint.
2. Late or incorrect government remittances
SSS, PhilHealth, Pag-IBIG, and BIR withholding tax each have their own deadlines — and they don’t all fall on the same date. Miss a deadline or underreport, and you’ll face penalties, surcharges, and interest. For businesses with more than a handful of employees, a payroll system that tracks these deadlines helps avoid surprises
3. Sloppy recordkeeping
DOLE requires you to keep payroll records for at least three years. That means hours worked, gross pay, deductions, and net pay — all documented. Gaps in your records make it harder to defend yourself if there’s ever a labor dispute
Conclusion
Your pay schedule affects everything from employee satisfaction to how much time your HR team spends on admin work. For most Philippine businesses, semi-monthly is the safest default — it meets the Labor Code’s requirements, keeps payroll runs manageable, and works for salaried and hourly staff alike.
If you’re still running payroll manually, automated payroll tools can handle the overtime math, tax withholdings, and government remittances covered in this guide. It’s worth exploring what fits your budget and team size.
FAQ on Pay Period
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What is the difference between a pay period and a pay date?
A pay period is the timeframe during which employees work and earn wages, while the pay date is the specific day on which employees receive their paycheck for that period. The pay date typically occurs a few days after the end of the pay period to allow for payroll processing.
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Can an employer have different pay periods for different types of employees?
Yes, employers can implement different pay periods for various groups of employees. For example, salaried employees might be paid on a semi-monthly basis, while hourly employees could be paid weekly or bi-weekly, depending on the company’s policies and the nature of the work.
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What factors should a company consider when choosing a pay period?
When selecting a pay period, companies should consider factors such as cash flow management, administrative costs, employee preferences, and compliance with labor laws.
