Payday and Pay Period

Pay shall be paid to the employee in cash or, if so agreed, to a financial institution designated by the employee. The employer shall bear the cost of the latter method. The payment shall be made or the pay shall be withdrawable on the due date.

Pay shall be paid on the last day of the pay period.If an employee's pay falls due on a Sunday, a religious holiday, Independence Day, May 1, Christmas or Midsummer Eve, or a Saturday that is not a holiday it shall be deemed to fall due on the preceding working day.

The salary payment period depends on how the salary is calculated. In addition, collective bargaining agreements may state how often the salary is to be paid.

If the employee’s salary is calculated on a weekly or longer basis, it must be paid at least once a month. The most common example of this kind of payment is a monthly salary. If the salary is calculated on the basis of a period less than a week, it must be paid at least twice a month. In such circumstances the salary is usually paid on an hourly basis. Performance pays are also usually payable twice a month. If the performance pay is paid monthly together with the salary, it may be paid at the same time as the principal salary is paid i.e. at least once a month. If the work for which the performance pay is payable lasts for more than the duration of a salary payment period, a portion of the performance pay corresponding to the time used for the work must be paid for each salary payment period.

If the salary is paid as a profit share, commission or on another similar basis, it must be paid at least once a month. If only a part of the salary is paid as a profit share, commission or on another similar ground the payment period for that part of the salary may be longer than one month but may not exceed 12 months. Profit share means that the salary is determined on the basis of the company’s profits.

When an employment relationship ends, the pay period also ends. If the employment relationship is cancelled, the final account must be paid immediately. If the employee is dismissed the pay period ends when the notice period ends. The pay period of a fixed term contract ends at the last working day of the contract. The before mentioned due dates can differ from the ordinary pay days. It is possible for the parties to agree upon the pay period differently.