How to Create a Biweekly Pay Schedule

  • Biweekly Pay describes a paycheck that comes in every two weeks, resulting in 26 paychecks per year.
  • Bi-weekly pay differs from half-monthly pay, which is issued twice per month and 24 times per year.
  • Whether or not you should use biweekly pay varies based on many factors, but payroll software is always the best way to implement it.
  • This article is for small business owners interested in establishing a biweekly pay schedule.

Think about a time when you were an employee rather than a small business owner. As you worked hard at your tasks, you may have reminded yourself sometimes that getting paid every couple of weeks was worth it. That last part is important – every two weeks, Many small businesses pay their employees every other week, on a biweekly pay schedule. Read on to learn how you can implement and administer this schedule for your business.

What is the bi-weekly pay schedule?

A biweekly pay schedule is the payment of employee wages every two weeks, often on Fridays. For example, if, in October 2021, your employees received their paychecks on Friday, October 8 and Friday, October 22, you paid them bi-weekly.

There are four weeks in a month, so theoretically, a biweekly pay schedule would result in two employee paychecks per month. In fact, biweekly pay schedules can sometimes result in up to three employee paychecks per month. If your first payday of the month was December 1 instead of December 8, your biweekly paydays would be December 1, 15 and 29. That's three paychecks a month on a bi-weekly pay schedule.

significant achievementsFYI: The biweekly pay schedule results in employee pay every two weeks, but in some months, that means three paychecks.

What is the difference between biweekly and bimonthly pay schedules?

The biweekly pay schedule can easily be confused with another popular pay schedule: semimonthly. Half-monthly pay is often referred to as “bi-monthly”, although this is not technically correct. As you can see from the definition of “bi-monthly”, “bi-monthly” would mean every other month, while semimonthly means twice a month,

Because semimonthly pay means twice the paycheck per month, and biweekly pay programs often provide two paychecks per month, these pay schedules can seem like the same thing. However, as the example above shows, biweekly and semimonthly are not exactly the same. They differ in these three major ways:

  1. The biweekly pay schedule results in paychecks being drawn every two weeks, almost always on the same day of the week. Half-monthly pay schedules result in two payments per month, not necessarily on the same day of the week. Let's say you pay your employees half-monthly on the 15th and 30th of the month, which means you can stop paying them on Wednesdays and Thursdays.
  2. The biweekly pay schedule can lead to three employee paychecks in a few months. However, semi-monthly pay schedules always lead to two employee paychecks per month.
  3. Because there are 52 weeks in a year, biweekly pay means 26 employee paychecks per year. Since there are 12 months in a year, half-monthly pay means 24 employee salaries per year. As a result, biweekly checks may have slightly lower wages than semimonthly checks.

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Are Biweekly Pay Programs Best for Hourly or Salaried Employees?

You may wonder whether biweekly pay schedules are appropriate for both hourly and salaried employees. Most payroll and HR experts would agree that biweekly pay is a great option for salaried employees. Opinions may differ on whether biweekly hours are appropriate for employees.

Some experts argue that weekly pay schedules help hourly employees better track how much overtime they worked in a week. These experts may also say that weekly wages are better for low-paid employees, as paying less wages per week can prove to be heavy for 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.

However, other experts will say that the biweekly pay schedule for your hourly employees should still be the go-to for you because your business is easier to track.

How do you calculate biweekly pay for hourly and salaried employees?

Biweekly wage calculations are generally easy for both hourly and salaried employees. Even though they are difficult, your payroll software will automate them for you. Follow these steps to calculate biweekly pay for hourly employees:

  1. Pull the employee's total hours worked during the biweekly pay period from your timesheet or timeclock.
  2. Be sure to include any paid vacation hours or other paid time off.
  3. Add this time to your employee's work hours during the pay period.
  4. Multiply this amount by the employee's hourly wage.
  5. The result is your employee's gross pay for the period. Be sure to subtract any withholdings to arrive at the employee's net pay. This number is what you will eventually pay the employee.

How do you calculate biweekly salary for salaried employees?

Follow these three steps to calculate biweekly salary for salaried employees:

  1. Check your payroll software to verify employee pay.
  2. Since there are 26 biweekly pay periods in a year, divide this pay by 26.
  3. The result is the employee's gross pay for this paycheck. After deductions, you'll have net pay, which is what you actually pay.

TipTip: Visit our reviews of the best payroll software to learn more about how payroll software can streamline your biweekly pay calculation. You can also learn about one of the best services in our ADP Payroll review.

Which industries and business sizes use which pay schedules?

The US Bureau of Labor Statistics (BLS) found that, as of February 2020, 43% of businesses paid their employees biweekly. This figure makes biweekly payments the most popular option across all industries.

The BLS has found that construction, trade and manufacturing employers often pay weekly. In fact, across all industries, 33% of businesses pay weekly. Half-monthly pay is the schedule of choice in 19% of companies, and it is roughly the same as bi-weekly in the finance industry. Some financial, professional, education, health and leisure services pay monthly, but this is the least prevalent pay schedule, with only 4.7% of businesses using this option.

Organization size may be more closely related to payment schedule options. BLS data for February 2020 shows that the prevalence of bi-weekly pay increases with the number of employees of the company. Interestingly, however, 34.9% of companies with fewer than 10 employees are paid weekly, while 33.7% are paid per week. Companies with 10 or more employees often pay biweekly. Learn more about all the different options when it comes to payroll frequency.

significant achievementsImportant achievements: Biweekly pay is the most common pay schedule, but some small businesses and a handful of labor-intensive sectors opt for weekly pay instead.

Advantages and Disadvantages of Biweekly Salary

When a practice is popular with small businesses, it is likely quite beneficial to employers. This assumption is true with biweekly pay. However, it is not without its flaws.

Here are some reasons why you might choose to pay your employees bi-weekly.

  • Predictability: When you choose Biweekly Pay, you'll find that you need to run payroll every two weeks. Since the biweekly paycheck traditionally falls on a Friday, you'll also know that you'll have to run payroll in advance to meet this Friday's deadline. Your employees will also receive paychecks at regular, predictable intervals, which can help them budget.
  • Easy Overtime Calculations: Of course, biweekly pay schedules can make for a more challenging overtime calculation than weekly pay. Compared to half-monthly pay, however, biweekly pay makes overtime pay a cakewalk. You'll need to check an employee's overtime hours for two consecutive work weeks, then include these in your calculations. Semi-monthly pay periods can split the work week into two separate pay cycles, thus complicating overtime calculations.
  • More Pay for Employees: For employees, biweekly pay schedules result in higher pay per year than halfmonthly schedules. The result is a strong cash flow that is ideal for paying bills, delivering groceries, and saving for retirement. When you choose biweekly pay, you will make your employees happier than when you do half-monthly pay.

Some employers may opt for another pay schedule due to the following disadvantages of biweekly pay.

  • Variable Pay Dates: Sure, biweekly payments result in paychecks every two Fridays, but that fact doesn't automatically determine paycheck dates. Half-monthly pay means pay on the 15th and 30th, although these dates will have to be changed if they fall on weekends or bank holidays. Even with this requirement, you may still find these dates handy for planning to run payroll.
  • Higher Payroll Costs: Increased employee cash flow with biweekly pay schedules can cost you more. That's because, with some payroll services, you'll pay a fee each time you run payroll. If your payroll service charges these fees, you may feel inclined to choose a semi-monthly or monthly pay program instead. That way, you run payroll 2-14 times less than biweekly pay and lower your costs.
  • Complex deduction calculations: During months when biweekly payments result in three paychecks, it can be challenging to split the monthly deduction between these checks. You have to divide the total monthly deduction by three — not two — and it's easy to forget. Instead semi-monthly and monthly pay schedules result in predictable, consistent cuts per paycheck, saving you stress and reducing the potential for human error.

What are the best solutions to implement bi-weekly pay schedule?

Generally speaking, the best way to start paying your employees biweekly is through payroll software. It is generally easy to set up a biweekly payroll schedule on these platforms. You'll log into your account, go to your payroll interface, and look for the option to add a pay schedule. You can then specify which of your employees you will pay on this timetable. Assuming that you pay all your employees twice a week, you can apply this schedule to your entire staff.

However, some employers may pay some employees biweekly and others weekly. For example, you can pay your hourly employees weekly and your salaried employees biweekly. This approach is far from unheard of, and it helps low-wage hourly workers increase their cash flow. It does so while minimizing the potential cost of running weekly wages for salaried employees, who can often wait longer for pay as they are higher.

Either way, payroll software is the easiest way to run a biweekly payroll schedule. This assumption is especially true if you choose software that allows you to run an unlimited number of payrolls without additional fees. In our OnPay review, we found that the company never charges a fee when you run payroll, no matter how many times you do so. When you research payroll software, you will almost certainly find an option that is both convenient and economical to start and maintain – biweekly payments.

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