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Understanding Australia and New Zealand’s Weekly, Fortnightly and Monthly Payroll Schedule

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Atlas Team

Atlas helps innovative companies like yours to expand, onboard, manage and pay international teams in 160+ countries.

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Published: 21 May 2024

Payroll strategy factors to consider when expanding globally 

Timely and consistent pay is one of the most important aspects to consider when pursuing long-term employee satisfaction. In fact, it’s a requirement so basic that it’s often taken as a given by both the employer and employee.  

And yet businesses often undermine payroll strategy, as well as understanding the cultural variations in pay frequency across countries, when expanding globally. Just 15% of organisations identify their payroll as highly strategic, seeing payroll as an administrative function, rather than one that can drive key business goals, including employee satisfaction.  

A consistent strategy around payroll is crucial for companies considering global expansion, as following local customs around payroll frequency can be as important for effective administration as the legal compliance that comes with it. In Australia, Fair Work Ombudsman requires employers to pay employees at least monthly, while most awards, enterprise agreements or registered agreements will set out when employees must be paid (weekly, fortnightly or monthly).  

Resulting in 26 pay periods per year, the Fortnightly Payroll is also the most used payroll type in the US as well as Canada, but organisations headquartered in the UK may be more comfortable with the Monthly Payroll. Certain Middle Eastern and East Asian countries, meanwhile, may prefer using the Lunar Payroll.  

Type Annual Number of Payroll Periods Benefits Challenges
Monthly 12 Administrative ease, particularly year-to-year. Potential cash-flow problems for the employee, leading to lower satisfaction.
Lunar 13 Can align with regions that follow a lunar calendar, with a set rhythm similar to monthly. Can lead to administrative headaches when aligning with the more standard Gregorian (solar) calendar, with additional challenges around its variable length.
Semi-Monthly 24 Simplifies budgeting for salaries across all months with a consistent number of pay periods. Pay dates fluctuating based on the number of days in a month can cause potential confusion.
Fortnightly 26 Good balance between cash flow for employees and administrative ease for employers. Doesn’t align consistently month-to-month, and the two months each year with three pay periods can complicate budgeting for employers.
Weekly 52 Least cash-flow issues for employees covering their expenses, leading to potential highest satisfaction. Administrative burdens of 52 payment processes per year.

Understanding which pay frequency the countries your business is expanding into should be a key part of your global expansion strategy.  

Here’s why. 

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Australia and New Zealand: Frequent pay as a worker’s right 

The desire for frequent and regulated pay schedules started in Australia with its labour movements in the late 1800s, particularly after the founding of the Australian Labour Party in 1891. As these movements evolved into industrial actions in the 1900s, there was a push not only for better pay for workers, but also for payment at more regular intervals. New Zealand, with its shared history of British colonisation and industrialisation, saw similar shifts. 

Being paid regularly began to be viewed as a right in Australia. Reporting in 2022 indicates that 52% of employees were paid fortnightly in Australia. In New Zealand, Fortnightly Payroll is particularly prevalent in government and government-adjacent industries.   

A key takeaway for employers that look to expand into these two markets will be that many potential employees in Australia and New Zealand may expect more frequent Payroll from their employer than in other markets, as this will align with their own payment schedules, including mortgage, utilities, or insurance payments. This income cycle helps employees and their families maintain a regular rhythm in their financial planning.  

Reporting in 2022 indicates that 52% of employees were paid fortnightly in Australia

Lunar? 14th Month Bonus? Understanding cultural nuance around pay 

Even in a globalised world, cultural variations still impact pay frequencies. While the Lunar Payroll used to be more widely used in the Middle East, payroll organised around the Gregorian calendar is becoming increasingly common – such as Saudi Arabia’s decision in 2016 to move away from the Lunar Payroll to Monthly for its civil servants. Companies still need to be aware of cultural variations that exist, such as pay in accordance with weekends beginning on Fridays for countries like Egypt.  

Some of the largest variations come around the 13th Month Salary, also known as a yearly bonus. Bonuses are expected in some countries, whilst in others are considered a nice-to-have. In both Australia and New Zealand, bonuses are often optional, though this depends on the industry.  

The timing of bonuses will also differ, often centred around a major festive season, like Christmas in many western countries and the Lunar New Year in China. Many workers in Austria even expect a 13th and 14th Month Salary in the form of Urlaubsgeld and Weihnachtsgeld (summer holiday and Christmas bonus).  

Just as Australian and Kiwi workers will tie their financial planning to the Pay schedule, employees around the world will plan their finances around these diverse pay frequencies and bonus structures. Therefore, companies need to understand and budget for these differences while managing an international workforce.  

Not doing so can have big consequences.  

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Uneven pay schedules risk dissatisfaction and churn 

Companies risk alienating employees when pay frequency either doesn't match the rhythm they've come to expect in their country, or there’s a general uncertainty about when they’ll be paid.  

This is especially challenging when a company, having recently expanded into a new country, might be managing a new workforce. Negative impressions around payroll are easy to develop and difficult to overcome, leading to higher dissatisfaction, and could risk churn.  

The opposite is also true: when companies offer pay frequencies and bonuses that are consistent and align with cultural expectations around pay, they’ll look more attractive to potential new employees.  

Strategising for payroll, therefore, is an essential part of your overall global strategy. And yet, less than half of the organisations Atlas surveyed found that their pay strategy is good at enhancing employee payroll experience and adjusting pay for work in different geographies. These elements of payroll strategy will grow more difficult to implement or alter the longer companies are established in that region.  

This means that your company needs to consider elements like optimal pay frequency, statutory and customary bonuses along with payroll compliance before beginning to do business in new countries. It’s crucial to implement systems that effectively pay employees regardless of where they are. An effective strategy will minimise any administrative headaches for payroll teams, as they navigate additional hurdles in new countries that might include time zone differences, currency conversion, and banking systems. 

Consistency, above all, is key: paying on-time regularly will always be the first step in building loyalty with your teams around the world.   

Employer of Records take the guesswork out of global payroll 

Such considerations make global payroll management highly complex, from the cultural variations of pay frequency, tax variations, to legal differences involved in payroll compliance, with regulations liable to change often.  

Sound confusing? It doesn’t need to be.  

An Employer of Record (EOR), like Atlas, plays a vital role in helping tackle these issues, not only from an operational standpoint, but culturally as well. The Atlas platform, which gets smarter with every employee it onboards, gives you a global overview of country specificities, including typical pay frequencies and legal considerations for each country. This bird’s eye overview allows you to implement payroll strategy globally and efficiently.  

At the same time, the Atlas team allows you to implement these strategies with the nuance needed for each country. As a direct EOR, Atlas is a full service provider with entities in over 160 countries, giving you the full range of integrated support for each country as well as in-depth knowledge of each country we operate in. At the same time, we simplify processes with a single point of contact for all accounts, giving you more time to focus on what matters

We take the guesswork out of payroll management and help your business scale globally.  

Atlas has entities in 160+ countries.

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