How to set your payroll anchor date
Picking PP1 of the year and the weekday rules that decide when every other paycheck lands.
The payroll anchor date is the first day of pay period 1 of any calendar year — the date the rest of your schedule cascades from. Picking the right anchor matters because it determines what day of the week every paycheck lands on, how holiday observance shifts the pay dates, and whether your year contains 26 or 27 biweekly pay periods. This guide explains how the anchor works for both biweekly and semi-monthly payroll and how to set yours.
Biweekly anchor: the OPM convention
The U.S. Office of Personnel Management anchors federal biweekly payroll to the first Sunday on or before January 1 of each year. Pay period 1 runs Sunday through the second following Saturday (a 14-day window), pay period 2 starts the following Sunday, and so on through the year. This convention is followed by every federal contractor, almost every PEO, and most third-party payroll providers serving small businesses. The schedules on this site use the OPM anchor without exception because the alternative — picking your own anchor — creates a constant translation problem with every other system that touches your payroll.
Pay date offset
The anchor sets the period boundaries; the pay date offset sets when employees actually get paid relative to the period close. The federal default is 5 calendar days after the period ends, putting the default pay date on the second Thursday after the period closes. Many private employers shift this to Friday (6 days after period end) to align with standard ACH settlement and the cultural expectation that payday is Friday. Whichever offset you choose, apply it consistently and re-shift backward whenever the resulting date lands on a weekend or federal holiday.
Semi-monthly anchor: the 15th and the last day
Semi-monthly payroll doesn't use a year-level anchor; it uses two month-level anchors — the 15th of each month for the first half and the last day of each month for the second half. Every state semi-monthly statute (California Lab. Code §204, Texas Lab. Code §61.011, Illinois 820 ILCS 115/3) keys off these two anchor dates. Some employers shift the anchors to the 5th and the 20th, or to the 1st and the 16th, but these are uncommon and create friction with the statutory windows in California and Texas in particular.
What changes when the anchor falls on a weekend
The first January 1 question every payroll administrator asks is what happens when the anchor itself is a holiday. For biweekly, this is rarely a problem because the anchor is "the first Sunday on or before January 1," which is by definition a Sunday and therefore not a federal holiday. The first pay date that follows might still shift backward if it lands on a holiday — for example, the 2024 PP1 paid on January 19 because January 18 was MLK Day weekend. For semi-monthly, the anchor itself can be a holiday — January 1 (New Year's Day), the second-half July 31 anchor (often near July 4), and December 31 (often near Christmas) are the recurring conflict dates. The schedules on this site already shift each affected pay date backward to the prior business day. Reference IRS Publication 15 for the official banking-day rule that governs both deposits and direct-deposit funding.
Switching anchors mid-year
Don't. Switching anchors mid-year means the affected employees will have a transition period that's either shorter or longer than a normal pay period, which in turn means partial-period prorated salary calculations and the corresponding accounting headache for every benefits accrual that keys off the pay period. If you have to switch — for example, to align with a new payroll provider — do it on the January 1 boundary or on the July 1 mid-year boundary, never in the middle of a quarter. Talk to a payroll consultant before pulling the trigger if your headcount is large enough that the operational risk is meaningful.
Documenting your anchor
Whatever anchor and offset you choose, write it down. The simplest format is "Pay period 1 of [year] begins [date]; pay dates are the [Friday] following the close of each pay period, shifted to the prior business day for federal holidays." Post it in your employee handbook, link it from your payroll software, and keep a copy in your bookkeeping binder. The anchor is one of those obvious-in-hindsight details that drives every downstream payroll decision, so it deserves explicit documentation instead of being implied by whatever pattern your software happens to default to.