Now that you know that your employees are classified properly as hourly, non-exempt, or exempt, and you know how to track their hours worked, it's time to decide how you are going to pay them. Payroll is a job that is never complete. As soon as one payroll period is over, checks are processed and distributed, then it is time to start on the next cycle.

There are dozens of manual, computer, and electronic resources available to assist you with processing your own payroll. The American Payroll Association (APA) provides a wealth of information on their Web site and offers training. You can also look to office supply stores and business services Web sites like Business.com and Paycycle.com to see what is available. Most time and attendance systems (time clocks) are compatible with a paycheck processing system. With these programs, the employee's timekeeping records are uploaded into a program that also computes the paychecks, including tax deductions.

Decide if paychecks will be processed weekly or biweekly. Salaried employees are usually paid biweekly or monthly. A biweekly payday (i.e., checks are distributed on alternate Fridays) will add two paydays to the year, for a total of twenty-six. Payday can also be on the first and fifteenth of each month, which will result in twenty-four paydays per year.

Direct Deposit

A recent APA survey found that in 2006, almost 94 percent of employees were paid by direct deposit. Direct deposit is an Automatic Clearing House (ACH) transaction that works in a way similar to that of debit cards. It's an automated transfer of funds from one place to the other. This is a popular option for paying employees with several benefits to employees:

• Immediate access to wages

• No waiting in line at the bank

• Free checking account at participating banks

• No delay in pay if there is an emergency

• Access to earnings when out of town on payday

A payroll card is available through some companies and banks for employees who do not have a bank account for direct deposit. The card works like a debit card for purchases. If the employee needs to pay a bill by paper processing, they can use the payroll card to purchase a money order.