Payroll Cycle
A payroll cycle is the recurring schedule a company follows to calculate wages, withhold taxes, and issue payments to employees or contractors.
What is Payroll Cycle?
A payroll cycle is the recurring schedule a company follows to calculate wages, withhold taxes, and issue payments to employees or contractors. Common cycles include weekly, biweekly, semi-monthly, and monthly pay periods.
How Payroll Cycles Work
Payroll cycles vary by country, contract type, and company preference. Each cycle determines:
- When pay is calculated (e.g. 1st-15th)
- When payments are made (e.g. 5th and 20th)
- Compliance rules (e.g. monthly in Brazil, semi-monthly in Mexico)
For global teams, managing multiple cycles across borders adds complexity:
| Country | Standard Payroll Cycle |
|---|---|
| 🇧🇷 Brazil | Monthly (mandatory) |
| 🇲🇽 Mexico | Biweekly (common) |
| 🇵🇭 Philippines | Monthly with 13th-month split |
| 🇳🇬 Nigeria | Monthly |
| 🇺🇸 U.S. | Biweekly or Semi-monthly |
Platforms like Sigma help unify these timelines in one dashboard.
Why Payroll Cycles Matter
- Understanding and choosing the right payroll cycle is crucial because it affects:
- Contractor trust - Predictable payments reduce churn
- Cash flow - Different cycles create different funding demands
- Compliance - Many countries legally require a specific cadence
- Operations - Smooth payroll boosts team morale and reduces disputes
Example
A U.S. startup hires contractors in Brazil, Argentina, and Nigeria. Each country has different payout expectations. With Sigma, they consolidate cycles into a biweekly contractor-friendly flow while maintaining local compliance and issuing automated reminders.
