What is bi-weekly payroll?

Bi-weekly pay is one of the payroll schedule option, where employers pay employees every other week. Employers typically choose a specific day of the week to pay employees on bi-weekly payrolls, such as every other Friday. Employees will receive 26 paychecks a year (52 weeks in a year/2).

How does bi-weekly payroll work?

Bi-weekly payroll splits the year into 26 pay periods, so employees receive wages every two weeks. With 12 months in a year, two months will have three paychecks while the other 10 months have two.

How do employers calculate bi-weekly payroll?

To calculate bi-weekly gross pay, employers can divide the annual salary by 365 days and multiply by 14 days. For example, if an employee’s annual salary is $70,000, their bi-weekly gross would be $70,000 / 365 days x 14 days, or $2684.90

What is bi-weekly vs semi-monthly pay?

Semi-monthly pay is different from bi-weekly pay. During semi-monthly pay periods, employees do not get paid every two weeks, rather, they are paid twice a month. If an employee gets paid on the first and third Friday of every month, but not on months with a fifth Friday, the employee is on a semi-monthly pay schedule.

Semi-monthly pay has 24 pay periods per year. This means there aren’t months with a third paycheck (like bi-weekly pay periods). Employers use 24 instead of 26 to determine what workers’ semi-monthly paychecks would total.

What are the benefits of bi-weekly pay?

There are several benefits to a bi-weekly pay structure for both employees and HR departments:

1. It’s easier for HR to process
   Processing payroll is easier and less resource-intensive for HR and supervisors who approve timecards as they can spend half the time approving timecards and processing payroll, compared to weekly payroll.
2. Frequent paydays make budgeting easier for employees
   From a budget perspective, frequent paydays may make it easier to handle finances. Employees know they can count on their paycheck arriving on the same day every other week. With longer pay periods, employees need to plan more in advance for financial decisions.
3. Dependable pay frequency
   Bi-weekly paychecks are a nice middle ground between weekly pay and monthly pay. Instead of needing to save money between weeks to pay bills on time, employees can use their first check for utilities and groceries while the second can cover the next month’s housing costs or remaining bills.
4. Employees receive “extra” paychecks for two months each year
   Employees receive a third paycheck in a month twice a year with bi-weekly pay periods. If workers budget regular paychecks to cover various expenses, they can use the third payday in a month as a bonus.
5.  Employees can receive longer overtime
   Overtime with bi-weekly pay works differently. With a bi-weekly pay period, any overtime limits per pay period set by the employer covers both weeks instead of one.

What are the disadvantages of getting paid bi-weekly?

Biweekly pay has some disadvantages compared to weekly, semi-monthly, and monthly payroll schedules, such as:

• It requires more paperwork. The more employers run payroll, the more administrative tasks are needed.
• More payroll means there are higher chances of human error.
• It’s more expensive to run a bi-weekly payroll than a monthly one.

How to choose the right payroll cycle

Choosing a payroll cycle depends on several factors. Here are some of the main considerations:

1. Employee preferences
   Different employees may have different preferences for when they get paid. For instance, hourly employees may prefer smaller bi-weekly paychecks, while salaried employees opt for monthly payments in larger sums.
2. Business needs
   From cash flow to operational needs, it’s important to consider what payroll cycles are viable. For instance, seasonal businesses or those with varying work hours may benefit from bi-weekly pay periods.
3. Legal requirements
   All payroll cycles and pay periods must comply with local, state, and country regulations.
4. Payroll processing
   Consider the time and resources it takes to process payroll and ensure the payroll team can manage the selected schedule.

Which industries typically use biweekly payroll?

The following industries frequently have bi-weekly payroll runs:

• Education and health services: to help teachers and staff budget during school breaks and summer vacations
• Leisure and hospitality: hotels and restaurants use bi-weekly pay to manage changing hours and seasonal fluctuations in staff schedules
• Information: covers a wide range of businesses producing, managing, and processing information

Biweekly payroll is most often used by businesses that employ both hourly and salaried employees.

Biweekly statistical payroll per country

For several countries, biweekly payroll is more advantageous than other schedules, or at least more popular. Here are the countries that use this payment schedule:

In the United States, biweekly payroll is the most common payment method. In Canada, employers can choose how employees get paid, as long as payment is consistent and on a recurring schedule. Many Canadian employers choose biweekly payments.
Employees in Zambia are paid weekly or bi-monthly depending on the employment contract. The United Kingdom uses a similar system to pay employees.

In Qatar, employees receive monthly payments unless their contract specifies bi-weekly payments.