Choosing a time-card cutoff that works
Why most small businesses end the pay period midnight Saturday, run payroll Monday morning, and pay the following Friday — and when to break that pattern.
The time-card cutoff is the deadline by which non-exempt hourly employees have to submit their hours for the closing pay period. Pick the wrong cutoff and you either run payroll on incomplete data or push the pay date later than promised. This guide walks through the common patterns and the trade-offs.
The standard small-business pattern
Most U.S. small businesses end the pay period at midnight Saturday (or Sunday, depending on the workweek anchor), accept time-card submissions until end-of-day Sunday, run payroll Monday morning, and pay the following Friday. The five-day window between pay-period close and pay date covers the time-card review, payroll calculation, ACH initiation (typically 1–2 business days for direct deposit to settle), and a buffer for federal holidays and weekend bank closures. The pattern is so standard that most payroll software defaults to it.
Variations
Some employers tighten the cutoff to end-of-day Saturday and run payroll Sunday morning to compress the pay-date offset to four days. This works if your payroll software supports same-day ACH origination but breaks if the workweek includes a federal holiday weekend (Memorial Day, Labor Day, July 4 weekend) where bank closures push the settlement out. Other employers extend the cutoff to end-of-day Monday or Tuesday and pay the following Friday or Monday — this is common in restaurants and other businesses where managers don't have admin time on the weekend.
Hard cutoff vs. soft cutoff
A hard cutoff means time cards submitted after the deadline are paid in the next pay period; a soft cutoff means late submissions are accepted but trigger manager review. Hard cutoffs are easier to enforce and produce cleaner data, but they require the manager to advance hours for any employee who can't submit on time. Soft cutoffs reduce the friction but make pay-period reconciliation harder. A clock-in/clock-out app with mobile submission removes most of the case for soft cutoffs.
How federal holidays affect the cutoff
If your time-card cutoff falls on a federal holiday — usually only an issue when the pay period closes the day after Christmas or New Year's — push the cutoff to the next business day and document the change in your payroll calendar. Don't try to enforce a Christmas-morning time-card submission deadline; you won't get the data and you'll start the year with a cranky team.
Cutoff and overtime calculation
Overtime under the FLSA is calculated on a seven-day workweek, not on the pay period. The time-card cutoff has to capture every hour worked in the workweek, including any hours worked between the cutoff time and the actual end of the workweek. A cutoff at 5pm Sunday for a workweek that ends midnight Sunday will miss any hours worked Sunday evening — which sounds rare but happens regularly in restaurants, retail, and on-call professions.
Documentation and enforcement
Document your cutoff in writing, communicate it on every new-hire onboarding, and post it where employees see it. The simplest format is "Time cards are due by [day] at [time]; submissions after that time will be processed in the following pay period unless approved by your manager." Apply the rule consistently — selective enforcement of time-card deadlines is one of those small-business habits that grows into a wage-and-hour complaint when an employee is terminated. Run a payroll process audit at least once a year to confirm the cutoff is working as intended.