Biweekly pay refers to receiving wages every two weeks, resulting in 26 pay periods annually, simplifying payroll management. Employees benefit from regular income and easier budgeting, but may need to adjust for months with three pay periods.
By Brad Nakase, Attorney
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When an employee is paid biweekly, they get their money every two weeks.
Every pay period is 14 days long and starts and ends on the same day of the week every time. The result is that there will be around 26 pay periods in a year, give or take a little bit, because the start and end dates of the year are not always the same.
During the 14-day pay period, an employee’s hours are tracked and they are paid the next week. In most cases, the start date of the pay period corresponds with the weekly tracking of overtime.
For biweekly pay, all of an employee’s hours worked between a set start and end time are recorded and kept track of. One way to accomplish this is by using an automated system or punch card system, among other tracking techniques.
The total wages owed for that period are then calculated by multiplying the hours by the employee’s hourly pay rate. Overtime is also taken into account if a worker puts in more than 40 hours per week.
Consider a worker who puts in 50 hours in the first week at $20 per hour. Paying at time and a half (1.5), they would receive $800 for the first 40 hours worked and $300 for the final 10 hours. That means the worker would receive $1,100 for the first week of work.
The worker would have made $600 in the second week if they had merely put in 30 hours. For the bimonthly pay period, that comes to a total of $1,700.
Payroll practitioners will calculate the total amounts owed to each employee at the conclusion of the pay period. They will also assess whether any withholdings are necessary for federal and state taxes, insurance premiums, or other valid deductions.
The employee will subsequently receive payment by the end of the week that follows the pay period’s conclusion. A year has 26 monthly pay periods, so there will be two months when workers get three payments.
Semi-monthly periods split each month into two parts, typically from the 16th through the end of the month and from the 1st through the 15th. Biweekly pay refers to paying employees every two weeks.
There is, however, another variation in which the first period is defined as starting on the first and ending on the last day of the month, for example, February 14th.
In actuality, there are 24 semi-monthly and 26 biweekly pay periods yearly.
This method of manually defining pay intervals may require more work, but it also results in more consistently sized payments for the employee.
Employees who regularly put in more than 40 hours a week might need to be informed about how the overtime week is determined. It is always determined using the same days of the week, such as Monday through Sunday, and it is unrelated to the calendar days on which the pay period is scheduled.
When implementing biweekly pay, there are several benefits and drawbacks for the company as well as the individual that HR should take into account.
Benefits for the company include:
Employee benefits include:
Drawbacks for the company include:
Drawbacks for employees include:
There are several things an organization should think about before introducing biweekly pay.
Priority one should be giving enough notice of the change to all staff members. Payroll processing should start with an explanation to employees of the benefits and drawbacks of biweekly pay periods. This will help to build confidence between the company and employee by ensuring that any questions or problems can be addressed up front.
Furthermore, it’s critical to thoroughly explain to staff members the advantages of biweekly payments when announcing the change. Putting together a list of commonly asked questions can also help ease any worries they may have.
In order to give employees enough time to make any necessary adjustments to their personal finances in order to prepare for the change, you should also try to give them as much notice as possible before making any changes to the pay period.
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