Are there any differences in paying employees on the 1st and the 15th
as opposed to paying them on the 15th and the 30th/31st?  We are
currently paying on the 1st & 15th.  I have suggested to my boss that
we switch to the t15th and 31st for 2005.  This would give him an
additional payroll expense in 2004 only, reverting to 12 months
reported in 2005.  I want to make the change for the benefit of our
employees.  Any reason we shouldn't?

Your boss is more than likely setting his pay periods based on when he
has to make his tax payments.  What is in your best interest may not
be in his.

I am interested in what is in his best interest.

I believe that if he pays you on the 1st and 15th his tax payment is
not due for 45 days.  If he pays you on the last day of the month, the
payment is due in 15 days.

When tax payments are due will likely not change with a change to 15/31 from 1/15.

An employer is either a monthly depositer or semi-weekly.  This
depends solely on the dollar value of tax deposits made in the
"lookback period", which is generally the previous 4 quarters.  If
total 941-type tax liability in the lookback period was less than
$50,000 the employer is a monthly depositer, if more then he is
semi-weekly.

Monthly depositers must make the total tax payment by the 15th of the
month after the payday date.  In this case, if the payday is the 1st
of the month, he does have 45 days float on the that payment, but only
30 days on he 15th payday.

Semi-weekly depositer get no such breaks, as all payments have to be
made by the next Wednesday or Friday following payday.

So, if your employer is fairly small and a monthly depositor,
justforfun is at least paritally correct.  If larger, there are likely
no tax effects from the change.  Of course, if your boss is using an
outside payroll company, such as the one I own, they are likely
impounding all taxes to thier own account on payday, and there is no
float for the employer anyway.