Biweekly pay is one of the most common pay schedules used by US employers. When you apply for a job, or are considering an offer from a company, it’s useful to know how often you will get paid. In this article, we’ll provide a quick explanation of what biweekly pay is and how it works, highlighting the pros and cons.
What Is Biweekly Pay?
Biweekly pay is a common pay schedule used by businesses and organizations in the US. Understanding biweekly pay meaning is essential for employees, as it enables them to budget effectively. As employees get paid every other week on a set workday, biweekly pay means that they receive their wages 26 times per year, rather than 12. The length of the month and the way the days fall dictate whether employees get paid two or three times per month. In most cases, biweekly pay for employees means receiving payment twice a month.
How Does Biweekly Pay Work?
Biweekly pay enables employees to receive wages every other week. The employer will choose a specific day of the week on which to pay employees. The employee will then receive their payment every other week on the specified day, with many employers choosing to make Fridays payday. In this particular case, the employee would receive their wages every other Friday. Depending on how the dates fall, in one month, an employee may get two pay packets and, in another, they may get three.
The amount an employee earns on a biweekly payment schedule will depend on whether they are a salaried employee or an hourly one. While salaried employees will typically receive the same amount every payday, those who have an hourly rate may receive a different sum every time they get paid based on how many hours they have worked.
It is worth noting that if you’ve only just started a new job, it may take up to three weeks to get your first paycheck even if you are paid biweekly. As most employers distribute wages a few days after a pay period, this allows them to process hours completed and deduct the relevant taxes.
What Is the Difference Between Biweekly and Bimonthly?
It is common to read about biweekly and bimonthly pay when researching jobs and looking at different payroll schedules. Despite being similar, these concepts are not the same.
Biweekly vs. Bimonthly
Biweekly pay means that employees get paid every other week on the same weekday, every other Friday, for example. Bimonthly pay, also known as semi-monthly pay, means that employees get paid twice per month. In the case of biweekly pay, the dates will differ, and there may be three paydays in one month. With bimonthly pay, employers issue wages on two specific dates every month, so that employees get 24 payments per year rather than 26. If you receive bimonthly payments, each paycheck will be worth slightly more than the value of biweekly paychecks.
What Are the Pros and Cons of Biweekly Pay?
Biweekly pay has some pros and cons compared to other payroll options, including weekly, monthly, and semi-monthly pay. The advantages and disadvantages of a biweekly pay schedule are:
- Budgeting: biweekly pay makes budgeting easy for employees, as they know they are getting paid every other week on a set day. Employees on a biweekly schedule can plan a budget for a two-week period or a month, as they know how much money will be coming in. Budgeting may be slightly easier with biweekly pay than bimonthly pay because the days change for bimonthly pay. One payment may arrive on a Tuesday and the other on a Friday, for example.
- Frequent pay: one of the main benefits of biweekly pay for employees is the frequency with which they receive their paychecks. It can be less stressful to cover bills and other expenses when you get paid every two weeks rather than every month.
- Consistency: biweekly pay is a consistent system which is simple for employees and employers to adopt.
- Monthly variations: for employers and employees, biweekly payment schedules can be slightly more complex than other options because some months have three rather than two payment dates.
- Personal preferences: some employees may prefer to be paid weekly, bimonthly, or monthly, depending on how they budget.