Bi-Weekly Payroll: What Is It and How It Differs from Semi-Monthly
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Bi-weekly payroll is the most popular payroll schedule in the US: the Bureau of Labor Statistics reports that 36.5% workers get paid on a bi-weekly basis.
But just because bi-weekly payroll is the most popular doesn’t mean it’s the best. Your employees' preferences, HR needs, and payroll software’s pricing and administrative requirements may point you in another direction–which we’re here to help you navigate.
People often assume bi-weekly payroll is the same as semi-monthly payroll, but they have a slight difference: bi-weekly means every other week, while semi-monthly means twice a month. We’ll talk more about the difference below, as well as other pay schedules like weekly (once a week) and monthly (once a month).
In this article, you’ll understand what bi-weekly payroll is, how it works, its pros and cons, and how it differs from other types of payroll. With this info, you’ll be well-equipped to pick the best payroll option for your team.
What is bi-weekly payroll?
Biweekly payroll is a payroll schedule in which employees receive paychecks every other week, on a specific, pre-arranged day of the week. Employees on bi-weekly payroll often get paid every other Friday (or a different day of the week), regardless of when one month ends and the next begins.
Other key info regarding bi-weekly payroll:
- Each year has 26 bi-weekly paydays per year except leap years, which have 27 paydays
- Workers receive two paychecks per month, 10 months out of the year and three paychecks the other two months
- Bi-weekly paychecks can come any day of the week: even if holidays or third monthly paychecks disrupt the schedule, it’s easy to temporarily switch the regular day for another
Bi-weekly vs. semi-monthly payroll: what’s the difference?
Bi-weekly and semi-monthly payroll may look almost the same at first glance. Companies pay the workers twice a month, and that’s it, right? Not quite.
Bi-weekly payroll occurs every two weeks, regardless of whether a month is four or five weeks long. Semi-monthly payroll occurs twice a month (usually on the 15th and the 30th/31st) regardless of the number of weeks in that month or the day of the week.
Let’s take a closer look at how semi-monthly payroll works:
- There are 24 paydays yearly, twice per month (no exceptions)
- Paychecks are larger since they’re less frequent (but the annual salary stays the same)
- Companies pay employees on specific dates: they usually chose the 15th and the 30th or 31st of the month (or the 28th in February)
- Paydays may come a couple days early or late, in the case payday falls on a weekend or a holiday
Semi-monthly payroll is less popular: only 19.8% of workers are paid twice a month on semi-monthly payroll, according to the BLS.
Bi-weekly payroll is more popular because it provides more consistency for companies, employees, and contractors alike. But it has more, slightly smaller paychecks per year, creating more work for human resources: each year, two months have an additional pay period (three instead of two).
The best way to overcome this administrative headache is to use automated payroll to reduce the amount of effort, time, and errors in payroll processing.
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Other payroll schedules: monthly and weekly
In addition to bi-weekly and semi-monthly (or bi-monthly), there are two more ways to pay the employees: monthly and weekly basis.
Running monthly payroll simply means you’ll pay all employees once a month, totaling 12 paychecks per year. In some countries, employees customarily receive a “thirteenth salary” as a yearly bonus in December.
Most businesses using monthly payroll pay their employees on either the first or last day of the month. Although less popular and inconvenient for some, there are also arrangements in which companies send out pay stubs in the middle of the month.
With weekly payroll, companies pay employees once a week for all the work they completed the prior week. So, 52 smaller paychecks per year.
This option is usual practice for construction, hospitality, and other hourly employees but less common for full-time salaried employees.
Pros and cons of using bi-weekly payroll
With easier paycheck calculations, frequent payments, and consistency, bi-weekly pay periods are convenient for workers, HRs, and employers.
Advantages of bi-weekly payroll
Consistency: Pay dates are fixed and both employer and recipient know when the paycheck will arrive. Creating budgeting plans is easier with a stable and frequent money flow. This is especially useful for freelancers and small business payroll managers, who may depend on the next payment coming through in a timely manner.
More frequent paychecks: Receiving a payment notification is a great morale boost and motivates workers to do their best, while also building trust with their employer. A bi-weekly paycheck may also feel like a bonus from time to time: twice a year, employees receive three paychecks per month, the third one feeling like an extra paycheck.
Easier to calculate overtime: Hourly workers can calculate their overtime pay easier, and receive the bonuses for overtime hours with each payment.
Fewer payroll errors: A stable payroll calendar means fewer mistakes for payroll providers!
Disadvantages of bi-weekly payroll
Smaller paychecks: Thanks to the pay cycle being shorter, paychecks will bring less money, although more frequently. Annual salary and hourly rate don’t change, but seeing “less money” on a paycheck may make workers think they’re earning less.
Added complexity to payroll processing: In the event of two monthly payments spanning across two months (because of holidays or weekends), it isn’t as easy to calculate monthly payroll deductions.
Increased payroll costs: If you’re outsourcing payroll services that charge you for each payday, bi-weekly may be more expensive because there are several paydays more in comparison to semi-monthly pay.
Deel is your simple global payroll solution
There’s no single best answer when it comes to choosing your payroll period.
To find a solution, each company needs to assess its budget, day-to-day processes, and industry quirks. Sometimes, especially for small businesses without dedicated payroll teams, the best solution is to invest in software that handles each payroll account on autopilot–especially if you hire international employees.
With international employees, you must account for each country’s employment laws, bank schedules, and local currencies. Deel helps you deliver payments across the world without stressing over compliance or wasting time on manual payroll.
Make mass payments in seconds, funding your whole payroll in a single click. Calculate taxes automatically and manage your payroll records in a streamlined way, all in one platform. We can even help you pay employees in crypto.