Payday and Pay Period

The salary must be paid into a bank account designated by the employee. The wages must be available to the employee on the due date. Payment in cash is permitted only for a compelling reason, and in such cases, the employer must have a receipt signed by the employee or other documentation verifying the payment.

Pay shall be paid on the last day of the pay period unless agreed otherwise. 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-based salary must usually be paid at least twice a month. If the performance pay is paid together with a monthly salary, it may also 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 paid lasts longer 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 on the basis of profit share, commission or another similar basis the payment period for this part of the salary may be longer than one month but may not exceed 12 months. Profit share in this context means that the salary is determined on the basis of the company’s profits.

Unless agreed otherwise, the pay period ends at the end of the employment relationship. If the employment relationship is terminated, 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 above-mentioned due dates can differ from the standard pay days. It is possible for the parties to agree upon the pay period differently.