What Is Biweekly Pay and How Does It Work? A Guide

When you receive pay every two weeks, you may think that it’s the equivalent of being paid twice per month. While usually you do get paid twice per month when you receive bi-weekly pay, sometimes you get paid more than twice in a month, depending on how many weeks are in the month. Because there are 52 weeks in a year, there are 26 bi-weekly pay periods.

Generally speaking, the best way to start paying your employees biweekly is through payroll software. Setting up a biweekly payroll schedule on these platforms is typically easy. You’ll log into your account, go to your payroll interface and look for an option to add a pay schedule. You can then indicate which of your employees you’ll pay on this timetable. Assuming that you pay all your employees biweekly, you can apply this schedule to your entire staff.

The 4-Minute Guide to How Biweekly Pay Works

The most common pay period frequencies tend to be monthly, semi-monthly (twice a month), bi-weekly (every two weeks), weekly, and daily. With semi-monthly payroll, it’s easier to apportion salaries and wages since there’s less need for an end of the month adjustments. The pay dates for a semi-monthly employee are usually on the 15th and final day of the month. For instance, let’s say you choose to pay your employees once every two weeks, on Friday.

While semi-monthly pay occurs twice a month, biweekly payment occurs every two weeks (usually on Fridays). Another factor to consider will be the software program or process used to issue the payments. Some payroll programs charge per pay cycle, making biweekly pay more expensive for the company than monthly.

• While salary and wages are important, not all financial benefits from employment come in the form of a paycheck.
• To make the process easier and remove much of the guesswork, many businesses opt to use a payroll service.
• If you grant your employees two weeks of vacation and PTO each year, that would equal 80 hours per year.

Here are some factors you should consider when determining your pay schedule. However, other experts would say that biweekly pay schedules should still be your go-to for your hourly employees because it’s easier for your business to track. Some experts argue that weekly pay schedules help hourly employees better track how much overtime they worked in a week. These experts might also say that weekly pay is better for low-wage employees, as low wages paid biweekly can prove burdensome to one’s cash flow. With weekly access to cash, low-wage employees may have an easier time paying bills and thus avoid harsh late-payment penalties. While salary and wages are important, not all financial benefits from employment come in the form of a paycheck.

There are four weeks in a month, so theoretically, biweekly pay schedules result in two employee paychecks per month. In reality, biweekly pay schedules can occasionally result in three employee paychecks per month. If your first payday of the month was Dec. 1 instead of Dec. 8, your biweekly paydays would have been Dec. 1, 15 and 29. A monthly payroll calendar is where you pay your employees at the beginning or end of every month.

#4. Employee Relations

The significant difference between getting paid twice in a month (semi-monthly) and getting paid every two weeks (bi-weekly) is the pay period. Semi-monthly employees receive paychecks 24 times in a year, but bi-weekly employees receive 26. Like almost any other year, 2023 has 26 biweekly pay periods, with two of the twelve months having three payments. Since there are 52 weeks in a year, there are 26 bi-weekly pay periods. Say you started your business five years ago, and your friend started one three years ago.

Buy what you love now. Pay later.

Once you start the year, you’ll pay your employees once every two weeks. This might sound simple, but that means for two months out of the year, you’ll have three pay periods instead of two. This is because bi-weekly payroll processing occurs on a specific day week, while semi-monthly processing periods shift around different days of the week.

Biweekly payroll system

When you consider these factors, It comes as no surprise that so many HR pros stick with the payroll practices and schedules they inherited from their predecessor. As a busy business owner, do you really have the time to manually calculate employee payroll? Maybe you’re still not sure exactly how payroll works and could use a virtual hand. For more information on these and other payroll software and services, be sure to check out The Ascent’s Payroll reviews.

Weekly

However, if the first paycheck in January is distributed on the 13th instead, there will be an additional paycheck given out in both July and December. Under the biweekly payment system, payments are made every second week. That would mean that the number of payments would depend on the number of weeks in the year. Since the number of weeks in a year is 52, the number of biweekly payments should be 52.

Get Forbes Advisor’s ratings of the best mortgage lenders, advice on where to find the lowest mortgage or refinance rates, and other tips for buying and selling real estate. Sign up (it’s free!) to see how BambooHR saves you time and money by combining multiple systems into one complete HR platform. 🤔💰Take a look at the salary inflation calculator or salary-to-hourly calculator. She enjoys writing about a variety of health and personal finance topics. When she’s away from her laptop, she can be found working out, trying new restaurants, and spending time with her family.

However, at the state level, most states have minimum pay frequency requirements except for Alabama, Florida, and South Carolina. For further details, consult state regulations regarding pay frequency. If you deduct benefits from your workers’ paychecks, a bimonthly schedule is a smart choice. Since many types of benefits, including health insurance benefits, come with premiums that are charged every month, a bimonthly schedule will make processing them easier.

These payroll services help employers like you track employee hours, set up automated payments and other payroll activities, all in accordance with employee rights. Some payroll services even have HR and accounting specialists to handle employee onboarding, taxes, https://personal-accounting.org/how-to-calculate-monthly-wages-if-you-are-paid/ benefits, paid time off and other factors that affect payroll. The only exception is leap years whose January 1 falls on Thursday (like 2032) or Friday (like 2044). Those years can have 27 biweekly pay periods, depending on the first payment date of the year.