Payroll, HR & labor compliance
Semi-monthly payroll cutoff best practices for Philippine companies
How to set payroll cutoff and pay dates, handle late attendance and approvals, deduct monthly contributions and run a calm, on-time payroll every 15 days.
Most Philippine companies pay semi-monthly, for example on the 15th and the last day of the month, with an attendance cutoff a few days earlier so payroll has time to compute, review and release. The Labor Code requires wages to be paid at least once every two weeks or twice a month, at intervals of no more than sixteen days. The cutoff calendar you build within that rule decides whether payroll is calm or chaotic.
A typical semi-monthly calendar
| Period | Attendance covered | Cutoff | Pay date |
|---|---|---|---|
| First half | 26th of previous month to 10th | 10th | 15th |
| Second half | 11th to 25th | 25th | Last day of the month |
The five-day gap between cutoff and pay date is used for attendance finalization, computation, review, approval and bank processing. Larger organizations with several companies often need that full gap; smaller ones may shorten it.
Paying for the period worked up to the cutoff means the days between cutoff and pay date are paid in the next payroll. Make sure new hires and resignations follow the same logic, and explain it in onboarding so employees understand their first payslip.
The cutoff week, day by day
- Cutoff day: attendance for the period is locked for regular processing. Employees and supervisors have been reminded two days earlier to file missing logs, leave and overtime.
- Day 1 after cutoff: timekeeping exceptions report (missing logs, unapproved overtime, absences without leave). Supervisors resolve exceptions by a fixed time.
- Day 2: payroll computation. Contribution and tax tables confirmed.
- Day 3: review. Variance report against the previous cutoff; investigate every net pay change above your threshold. Finance reviews totals.
- Day 4: approval by the authorized signatory; bank file prepared.
- Pay date: salaries credited; payslips published.
Handling late items
Late attendance corrections and overtime approved after cutoff are normal in large companies. Decide on one rule and apply it everywhere:
- Next-cutoff adjustment (recommended): late approved items are paid in the next payroll as an adjustment, clearly labeled on the payslip.
- Off-cycle payroll: reserved for material errors, such as a missed salary, with approval from the payroll head.
Avoid re-opening a payroll that has been approved, because it breaks the audit trail.
Deducting monthly contributions in a semi-monthly payroll
SSS, PhilHealth and Pag-IBIG are monthly. Common policies:
- Deduct in the second cutoff, when the month's compensation is known. Simple and accurate for variable pay.
- Split equally across both cutoffs, with a true-up in the second. Smoother net pay for employees.
Withholding tax uses the semi-monthly table for each cutoff, then annualization corrects the year. See SSS, PhilHealth and Pag-IBIG.
Payroll calendar for many branches and companies
When several companies or branches share a payroll team, stagger work rather than cutoffs. Keep the same cutoff for everyone, but schedule review slots per company so reviewers are not handling five registers on the same afternoon. Publish the calendar for the whole year in advance, including holidays that move pay dates.
If a pay date falls on a weekend or holiday, most companies pay on the preceding working day. Write that rule into the policy and the calendar.
Metrics worth tracking
- Percentage of attendance exceptions resolved before computation
- Number of post-cutoff adjustments per payroll
- Off-cycle payrolls per quarter
- Days from cutoff to pay date
- Payroll inquiries per 100 employees after each pay date
How software shortens the cutoff week
Most cutoff stress comes from chasing missing approvals. Systems that route leave, overtime and schedule changes through approval stages *before* cutoff, and show exceptions in one list, remove most of it. Cirquolus Timekeeping handles requests and approval stages; Cirquolus Payroll computes from approved attendance and routes the register for approval; employees view payslips in the employee portal.
Frequently asked questions
What is a payroll cutoff?
The last day of the attendance period included in a payroll. Work after the cutoff is paid in the next payroll.
How many days between cutoff and pay date is normal?
Many Philippine companies use about five days. It depends on headcount, the number of companies and approval steps.
Is semi-monthly payroll required in the Philippines?
The law requires payment at least twice a month or every two weeks, with intervals of no more than sixteen days. Semi-monthly is the most common way to comply.
How should late overtime approvals be paid?
Pay them as a labeled adjustment in the next payroll, unless the amount is material enough to justify an off-cycle payroll.
Bring this workflow to a Cirquolus demo.
Show us your current process, companies and branches. We will map it to the modules you need and propose a realistic rollout.