There are several ways in which employers can choose to pay their employees, and the pay periods might vary within one company. Some companies may pay their employees weekly, biweekly, or monthly.
Biweekly pay is the most common type of pay schedule used in the United States. Whether you’ve just started a new job or you’re an employer considering different pay schedules for your company, it’s important to understand how biweekly pay works and its benefits.
What is Biweekly Pay?
Biweekly pay means that employees are paid every two weeks. This system is most common in the United States, where most employers pay their employees biweekly. This means you will have 26 pay periods in a year, or 24 if you work for a company that does not offer payment on the last working day of the year.
The most common type of biweekly pay is where employees are paid for 80 hours every two weeks. This system is often used in industries where employees regularly work overtime, such as construction or manufacturing.
The most common industries that use biweekly pay include:
How Does Biweekly Pay Work?
With biweekly pay, employees are paid for the hours they worked in the past two weeks on the Friday of that week. It doesn’t matter what date of the week the pay period started, as long as it was exactly two weeks ago. For example, if today is Friday, August 10th, and an employee’s last payday was Friday, July 27th, that employee will get paid for the hours worked between July 28th and August 10th ‘today’.
If employees work more or less than two weeks in a row, their pay will be adjusted accordingly. For example, if an employee works three weeks a row, they will get paid for the hours worked in the past two weeks plus one week’s worth of vacation pay. On the other hand, if an employee only works one week in a row, they will only get paid for the hours worked in that one week.
A biweekly pay schedule differs from a weekly pay schedule, where employees are paid for the hours worked in the past week on the Friday of that week. It also differs from a monthly payment schedule, where employees are paid for the hours worked in the past month on the last day of that month.
Benefits of Biweekly Pay
There are a few benefits of biweekly pay for both employers and employees.
For employers, biweekly pay can help with cash flow because they only have to write checks every other week instead of every week. This can also save on payroll costs because there are fewer checks to write and process.
For employees, biweekly pay can help with budgeting because they know precisely when they will be paid and how much they will receive from their pay periods. This can make it easier to plan for expenses and avoid late fees or overdraft charges.
It also reduces the risk of payroll errors because there are fewer pay periods. This benefits employers and employees because it reduces the chances of anyone being overpaid or underpaid.
There are also fewer opportunities for employees to make mistakes keeping track of their hours worked when paid biweekly. This can save employers time and money that would otherwise be spent correcting errors.
Disadvantages of Biweekly Pay
The main disadvantage of biweekly pay is that it can sometimes lead to discrepancies between what employees expect to be paid and what they receive. This is because there are often holidays or other days off during a biweekly pay period, which can reduce the number of hours an employee expects to be paid for.
Biweekly pay can sometimes create financial hardships for employees if they have an unexpected expense come up and they don’t have enough money saved to cover it. This is because they must wait two weeks for their next paycheck instead of one.
For salaried employees, biweekly pay can also lead to fluctuations in their paychecks if their hours vary weekly. This can make it difficult to budget and plan for expenses.
Some employers may also require employees to submit their hours worked weekly, which can create additional paperwork for both the employer and the employee.
How To Budget Using Biweekly Pay For Employees
If you are paid biweekly and concerned about making ends meet in between your biweekly pay period, you can do a few things to ensure you are budgeting correctly.
If you don’t know your monthly expenses, start by creating a budget. This will help you to see where your money is going and where you may need to cut back to make ends meet.
Once you have a budget, ensure you automatically transfer a fixed amount of money from each paycheck into savings. This will help you build up an emergency fund that you can tap into if an unexpected expense comes up.
And make sure you are tracking your spending so that you can see where your money is going. This will help you to identify any areas where you may be overspending and help you to make adjustments to your budget accordingly.
You should keep in mind when you receive your bi-weekly paychecks so you can budget and plan your spending around it. This will help to ensure that you are able to make ends meet in between your biweekly pay periods.
Alternatives to Biweekly Pay For Employers
If you’re an employer considering switching to biweekly pay, there are a few alternatives.
One alternative is to switch to semi-monthly pay, where employees are paid twice a month on the 1st and 15th of every month. This can help reduce the chance of discrepancies between what an employee expects to be paid and what they receive.
Another alternative is to switch to monthly pay, where employees are paid once a month on the same day. This can also help reduce the chance of discrepancies between what an employee expects to be paid and what they receive.
And if you’re concerned about the financial hardship that biweekly pay can cause for some employees, you could consider offering employees the option to receive weekly or biweekly pay. This way, employees can choose the pay period frequency that works best for them and their financial situation.
The bottom line is that there are pros and cons to biweekly pay, and it’s crucial to weigh all of the factors before making a decision. There are alternatives to biweekly pay that you may want to consider if you’re an employer. Ultimately, the best decision is the one that works best for your business and your employees.
Conclusion: How Does Biweekly Pay Work?
Whether you’re an employee or an employer, it’s essential to understand how biweekly pay works. For employees, biweekly payments can sometimes create financial hardships if unexpected expenses arise. And for employers, biweekly pay can lead to discrepancies between what an employee expects to be paid and what they receive.
There are alternatives to biweekly pay that you may want to consider, such as semi-monthly or monthly pay periods. And if you’re an employer, you could also offer employees the option to receive weekly or biweekly pay. Ultimately, the best decision is the one that works best for your business and your employees.
How does biweekly pay work?
Biweekly pay works by dividing your annual salary into 26 equal payments and then dispersing those payments over a year. So, if you make $50,000 a year, your biweekly pay would be $1,923.08.
How do you work out biweekly pay?
To calculate biweekly pay, you must divide your annual salary by 26. So, if you make $50,000 a year, your biweekly pay would be $1,923.08.
What is the difference between getting paid semi-monthly and biweekly?
The main difference between getting paid semi-monthly and biweekly is the frequency of your paychecks. With semi-monthly pay, you will receive two paychecks each month, typically on the 1st and 15th. With biweekly payments, you will receive 26 paychecks throughout the year, typically every other Friday.
What are the pros and cons of getting paid biweekly?
Some pros of biweekly pay include getting paid more frequently, which can help with budgeting and cash flow. Some cons of getting paid biweekly include the potential for financial hardship if you have an unexpected expense and discrepancies between what you expect to be paid and what you receive.