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Payroll for Veterinarians


Payroll for Veterinarians: Choosing Pay Period

It’s payroll day, hurray! But, of course, everyone likes to get paid! After all, we worked hard and devoted time and passion. Your payroll for veterinarians should be initially well thought out when implemented.

When starting your veterinary practice, you must start your veterinary payroll and decide about pay periods. Most veterinary practice owners will go with what they are accustomed to. Usually, they select whatever the pay period was when they were an associate. 

A pay period is a recurring time frame used to calculate wages and establish payday. Payday is the actual day when employees receive their paychecks. Pay periods are fixed and can be repeated weekly, bi-weekly, semi-monthly, or monthly. It’s important to know that the pay period is different from a workweek. 

Payroll for Veterinarians: Weekly pay period  

Getting paid every week might seem like a good idea. It is commonly used in many industries outside of the veterinary sector. 

Pros: From the cash flow perspective, it is easy to plan for. The cash required to run the payroll is much smaller than a monthly pay period. Employees get a financial reward more often, and it is straightforward for employees to remember that they get paid, for example, every Friday. Overtime calculations are relatively easy to understand. 

Cons: There are 52 weeks in any given year! That means 52 payroll runs. The number of payroll runs adds to the cost of your payroll. Some payroll software, like QuickBooks and ADP, charges per payroll or charge a fee for each direct deposit. Consider the extra cost of processing payroll if you choose weekly pay periods. Gusto payroll software has a flat price, so it doesn’t matter how many payrolls you run. However, your accountant understandably will charge you more since it is more labor-intensive.

Depending on the schedule the IRS has assigned you, payroll taxes might be more complicated than if you go with semi-monthly payroll. Calculating benefits might be time-consuming, especially when an employee is terminated or quits. The weekly amount might not be enough to cover the outstanding health insurance premium, unpaid employee invoices, or other final deductions. Always verify your state rules for employee deductions, as the laws often vary by state. In a small practice, weekly payroll can bring another burden. If the owner is the final approval of the timecards, they might not be able to unplug on their vacation unless they utilize cloud-based timesheets and payroll. 

Payroll for Veterinarians: Bi-weekly Payroll

This is the most common pay period in the veterinary industry in the U.S. Even the big companies like VCA and Banfield pay their employees bi-weekly. Bi-weekly means every two weeks. 

Pros: It is straightforward for employees to understand the pay periods, and the payday is usually set—for example, every other Wednesday. Overtime calculations are generally easy to understand.

Cons: There are 26 pay periods per year, meaning two payrolls in a month. Twice a year, there will be three payrolls in a month. The extra payroll can be hard to manage from a cash flow perspective, especially for start-ups. Another downside is that financial reporting for the month where three payrolls are present will misrepresent your profitability. It might be hard to spot what is causing the decline in profit. We usually hear, “well, there were three payrolls that month.” Comparing one month to a historical month can give you a sense of accomplishment, as the historical month might have three pay periods, and the current didn’t. It looks like your clinic rocked it compared to last year during the same month. Of course, this can be avoided if actual payroll is accrued within the month incurred. However, it is rare for start-ups or smaller practices to do so. Another disadvantage is that benefits calculation can be challenging since benefits are usually invoiced monthly. 

Payroll for Veterinarians: Semi-Weekly Payroll

This is the second most common choice for veterinary clinics.

Pros: 24 payrolls in a year. Calculation of benefits is relatively easy (dive by 2!). Financial statements and performance reports are easy to compare since every month will have two paydays. It is easy for veterinary clinics to project and budget the payroll cost with semi-monthly payroll. 

Cons: the pay periods are 1-15th of the month and 16-end of the month. This can be puzzling for many employees, especially those who are used to bi-weekly payroll. There isn’t a specific day of the week that the employee gets paid. Instead, there is a particular date, for example, every 5th and 20th of the month. If those dates fall on the weekend, the payday might be pushed to the following Monday or run early the Friday before the regular day. Overtime calculation can be puzzling since a partial workweek is a repeating occurrence. Make sure to utilize an electronic timecard that can do the math for you, for example, Homebase, Quickbooks Time, and so many others! 

Monthly Payroll for Veterinarians

It is scarce to see monthly pay periods in the veterinary industry within the U.S., the standard for most industries across Europe. In the U.S., this could be hard financially for most people. 

Pros– Easy management of benefits and potentially lower cost of payroll since there are only 12 paychecks in a year to run. 

Cons: Since this is a very rare pay period choice, finding people willing to work for your hospital might be challenging. Monthly paychecks from a personal perspective do require budgeting skills for employees who live paycheck to paycheck. Payroll advance requests might occur more often because of that. 

Here is one final tip!

Payday vs. pay period. 

As veterinary consultants, we highly recommend that your stated payday follows a few business days after the end of the pay period. Make sure to know your software’s actual payment time constraints and state requirements. When considering your initial payday policy, consider the additional time it will take for final timesheet approval, special considerations due to benefit changes, etc. Give yourself room if the software is down for a day, you are down with nasty flu, or simply on vacation. Too many times, we encounter practices with unrealistic paydays. Anywhere from the same day to a day or two after the end of the pay period. Time is your friend! Don’t set yourself up to fail the deadline. Your employees are counting on the money to land in their account. Are you using a cloud based payroll system when processing your payroll? We highly recommend using our cloud based payroll system for ease of processing your payroll.

Whichever route you choose, make sure you set yourself for success. It usually is easier for an employee to adjust from less frequent payroll to more frequent than the other way around. Make sure you are aware of the cost and your software abilities. Questions about software, using cloud based systems or what is the best pay period for your practice? Don’t hesitate to contact us. 



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