Glossary

What is Bi-weekly payroll?

Bi-weekly payroll is a pay schedule where employees receive their wages every two weeks on a specific day, such as every other Friday. This schedule results in 26 pay periods in a typical year (27 in leap years) and provides a predictable and consistent payment cycle for employees and employers alike.

Key facts about bi-weekly payroll

• Pay frequency: Employees receive two paychecks per month for 10 months and three paychecks during two months of the year.
• Fixed paydays: Payments occur on the same day of the week, even if holidays or unusual months require temporary adjustments.
• Flexibility: Works well for both hourly and salaried employees, making it suitable for a variety of industries.

Bi-weekly vs. semi-monthly payroll

While bi-weekly and semi-monthly payroll schedules are often confused, the two differ:

• Bi-weekly: Paychecks are issued every two weeks (26 pay periods per year).
• Semi-monthly: Paychecks are issued twice a month, typically on the 15th and last day of the month (24 pay periods per year).

Advantages of bi-weekly payroll

• Consistency: Fixed paydays make it easier for employees to budget and for employers to manage payroll processes.
• More frequent paychecks: Receiving pay every two weeks provides employees with regular income and twice a year includes a “bonus” third paycheck in a single month.
• Overtime calculations: For hourly workers, overtime is easier to calculate and process on a bi-weekly schedule.
• Reduced payroll errors: A stable and predictable pay cycle minimizes mistakes in payroll processing.

Disadvantages of bi-weekly payroll

• Smaller paychecks: Employees receive smaller amounts per paycheck compared to semi-monthly or monthly pay schedules, even though the annual earnings remain the same.
• Administrative complexity: Overlapping pay periods across months or holidays can complicate payroll calculations and deductions.
• Increased costs: Businesses that outsource payroll services may incur higher costs due to the increased number of pay periods compared to semi-monthly schedules.

Should you use bi-weekly payroll?

Bi-weekly payroll is the most popular pay schedule in the U.S. and is well-suited for businesses with a mix of hourly and salaried employees. However, it may not be the best fit for every organization. Consider your employees’ preferences, administrative capacity, and the costs associated with your payroll system.

Alternative payroll schedules

• Semi-monthly: Two paychecks per month, typically on the 15th and last day.
• Monthly: One paycheck per month.
• Weekly: Employees are paid every week, resulting in 52 pay periods per year.

Selecting the right payroll schedule depends on your workforce, operational needs, and organizational priorities. Bi-weekly payroll offers a balanced approach for many businesses but should be chosen thoughtfully.