What is Biweekly Pay?
Biweekly pay or biweekly payroll system schedule are the names of the same phenomenon. This is the type of payroll whereby employees are paid salaries in accordance with the biweekly pay periods – once paid in two weeks - instead of weekly pay.
When the business owner(s) order their HR to follow a biweekly pay schedule, it means you are paying your employees on a payday which is a day every other week.
If you choose the bi-weekly pay periods for your employees to pay, you may choose every alternate Friday or Monday. This was the employees receive 26 paychecks in 52 weeks per annum. When there is a leap year, your workers will receive an extra paycheck total of 27 paychecks a year.
There are certain other payroll systems mechanisms in vogue at the global level like weekly and monthly etc. As far as the biweekly pay structure is concerned, below you will find pros and cons for Biweekly Pay.
What are the Advantage of Biweekly Pay?
Following are the advantages of Bi-weekly Pay:
- Biweekly pay arrangement minimizes the paperwork done against the weekly payroll system
- It reduces time spent on weekly payroll to a biweekly schedule
- This may lessen the possible error chances in payroll if any
- Update of the records for HR is easy in biweekly pay mechanism as compared to other arrangements
- Biweekly structure of payrolls reduces usual tax deductions and its calculations routinely done on otherwise
- It too lessens the burden of HR for tacking the checks frequently I other arrangements, if any in practice
- These sort of arrangements are feasible for employees that they are at ease for budgeting regularly as getting paychecks every alternate week
- Setting a payday in the biweekly arrangement is better than having any payday which is unknown in weekly arrangements, for your workers to manage their financials – paying once a month to you workers is on the one pay date of every month but that may fall on any day of the week, different from biweekly wherein there is one same weekday which helps in managing finances for your employees
- It eases the calculation of overtime payment calculations for your HR team
- Save on, from weekly to biweekly, your finances – in case HR is services hired from a third-party consultant, etc.
- When employees have a habit of savings then they are able to save more on every paycheck in a biweekly system of payments
What are the Disadvantage of Biweekly Pay?
Following are the disadvantages of Bi-weekly Pay:
- Some months come in the year where you need to pay three checks of pay to your employees in the setup of biweekly pay mechanism, and for that budgetary arrangements and management should be considered that you have ample extra charges to be paid to workers
- Your business partner/consultants may charge you more for biweekly paychecks issuance in comparison with monthly payrolls
- For contractual employees, the weekly payroll is better in comparison with biweekly payments so as and when to end, it needs not to wait for another week to complete
- Complications in this system exit due to few months when it comes to three paychecks a month:
• This system consists of smaller checks payments as compared to the bi-monthly paychecks whereby the former has more number of checks having smaller denominations
• This system due to two extra checks per year has extra-budgetary burdens
• Additional charges may be there for processing payroll each time, therefore biweekly costs more per run as compared with the bimonthly
• Bookkeeping is more complex in a biweekly system as it needs more entries than monthly or bi-monthly payments
- Difficulties are caused for the HR department when it comes to two different payroll systems to run at the same time is biweekly pay systems for hourly employees and semi-monthly pay for salaried employees
What is more, to know about biweekly pay is:
- According to the United States Department of Labor (DOL), the following are the departments which they usually use biweekly systems in their payroll:
• Department of Education and health services
•Hospitality and leisure
- If you choose a bi-monthly payroll system in place of a biweekly one, and in that case, if the payday falls on the holiday, it creates hardships for your HR to either pay in advance or delays the same, thereby calculations are disposed to possible inaccuracies or at least challenges
- According to research reported by the United States Bureau of Labor Statistics:
• Approximately 43% of the US employers pay their employees biweekly, and 33% of employers pay their workers on a weekly payroll system basis
• The business concerned having a smaller number of employees pay to workers on weekly basis but as and when it improves the number of employees (say around 1000 employees) then they pay 700 workers (70%) as biweekly and the rest get weekly
Related: Wages, Basic Salary, Hourly Employee, Pay Stub, Straight Time Pay