What is Biweekly Pay? Pros & Cons

Biweekly pay refers to a system of paying employees’ salaries every two weeks.  For example, someone may get paid every other Friday.  The Biweekly pay schedule typically ends up being about twice a month interval, which translates to 26 paychecks per year.

The name “biweekly” evokes the image of a person working every two weeks. Biweekly pay has been commonly used for paying teachers’ salaries since it equates to a 26 pay checks per year. In contrast, people who work on a monthly payroll only receive 12 paychecks per year. Biweekly should not be confused with semi monthly.

Since biweekly pay involves an employer paying their employees every two weeks, that means that the employee receives their paychecks more frequently than compared to a monthly pay schedule. 

This can be a great perk for those that like getting paid often as opposed to waiting a whole month before receiving their next paycheck. The more frequently you receive your paycheck, the more frequently you can get your finances in order.

Biweekly pay period also means that an employee receives about two paychecks per month. In many cases this means that an employee’s boss will simply divide the employee’s monthly salary by two and have the employee receive half of their monthly pay on each paycheck. 

The biweekly pay system means that the boss will submit a total of 26 paychecks per year.

The employee will see that their biweekly pay has been calculated as a normal paycheck. However, since their paycheck is actually half of their monthly salary, the employee will simply receive this total 26 times over the course of the year. 

This can be useful in helping employees to budget their finances with their biweekly pay.

What are Pros and Cons of biweekly pay for both the Employee and the Employer:

Pros of Biweekly Pay: Employee’s Perspective

1. 26 Paychecks Per Year:

Biweekly pay translates to 26 paychecks per year versus 12 paychecks on a monthly pay schedule. This means it’s easier to budget your salary.

2. More Money More Often:

In addition to getting paid 26 paychecks per year, employees will get twice as much money on every paycheck compared to weekly pay. This means more money on hand to pay bills and whatnot.

3. More Money to Save:

Since employees get to enjoy getting paid biweekly, they might choose to save more. They might even get ahead of their loan payments which can help lower their interest rate.

Cons of Bi-Weekly Pay: Employee’s Perspective

1. Difficulty With Budgeting:

Budgeting can become more confusing with biweekly pay. Employees need to remember to set aside money for those 26 paychecks. This is a good idea if workers have a habit of always blowing their paychecks far too early.

2. Pressure to Use Their Pay On Vacation:

Some workers may have a hard time saving money to cover vacations or other expenses using their biweekly paychecks.

It can be tedious to have to wait for twice a month, counting down the days until payday comes around again.

You may want to talk to your employer about options that are more appealing to you, especially if you are an exempt employee. You can ask if your employer will agree to pay you once

3. Likely to Be Paid Less:

Employees who only work every other week might find that their hours are not worth as much as those who work weekly.  If this is the case, you need to re-adjust the employee’s pay.

4. Harder Time Managing Expenses:

Employees need to be more conscious that they will only get paid every other week instead of once a month. While it’s still possible to manage expenses with biweekly pay, it’s more work than with traditional weekly pay.

Pros of Bi-Weekly Pay: Employer’s Perspective

1. More Compressed Scheduling:

The nature of a biweekly payroll allows employees to effectively increase their pay without actually raising their base salary. Employers can adapt their payroll calendar to accommodate this since there are fewer pay dates each year. In fact, employers may even choose to pay once per month which can save on payroll taxes, depending on national laws on the subject.

2. Tax Planning for Employer:

It is easier to withhold taxes with biweekly since there are fewer pay dates than compared to a weekly pay schedule. This is particularly helpful for those who live paycheck to paycheck and need the money as soon as the check doesn’t arrive.

There is pride in knowing that you can pay your own bills and stay on top of other financial steps and responsibilities that come naturally and automatically with a biweekly paycheck system.

3. More Accurate Scheduling:

Employers with biweekly payroll are able to more quickly re-adjust their pay to make up for any issues with employee payroll.

4. Save on Costs:

Biweekly payroll is easier to manage without the need for expensive software systems. Compared to a weekly pay schedule, biweekly payroll systems are likely less expensive to administer, though it will depend on the organization. A weekly pay schedule requires 52 paychecks, where as a biweekly pay schedule requires 26 paychecks.

5. Adjustments to Employee Behavior:

Psychologically, biweekly pay can encourage employees to change their behavior for the better. This includes more consistent behavior like taking on overtime to more consistent behavior like paying rent on time.

Cons of Bi-Weekly Pay: Employer’s Perspective

1. Can be Harder to Budget:

The cons of biweekly pay center around the fact that employees may receive less pay in a given pay check than on a monthly pay schedule. For example, an employee who makes $1000 per month will only receive $500 per paycheck on a biweekly schedule. This may be a disadvantage for those that rely cannot manage their expenses.

2. Confusing for New Employees:

Some employees might have a difficult time understanding a biweekly pay system. You can deal with this by being more explicit about how you used the system, or by embracing it with a company-wide meeting if you have employees who are new to you.

3. Check Cashing Fees:

There are check cashing fees every time you cash checks. The more checks, the more fees. Compared with a monthly pay schedule of 12 monthly a year. A Biweekly pay schedule of 26 checks a year. That is more than twice the number of checks to cash than on a monthly pay schedule.  

4. Harder to Assess Performance:

A biweekly payday means that it’s harder to get performance feedback since there are fewer opportunities over the year. It’s important that you still get feedback, try to set it up for once per month. This is especially true for employers that pay commissions and bonuses. Compared to a weekly pay schedule of 52 paychecks a year. That is twice as many opportunities to assess an employees commission and bonus performance.

Final Thoughts

Ultimately, biweekly pay can give employees a sense of increased financial security. Although it means that they receive less per paycheck, this means that they receive more checks per year. In cases of emergency, this means that they can move more quickly to resolve their financial issues.

We all know that the workforce landscape is changing. More and more companies are switching over to biweekly pay and there are good reasons for this. 

By changing their payroll calendar, employers can increase their profits and save on payroll taxes. On the other hand, biweekly pay gives employees extra money to save and spend. 

As always, it’s important to remember that payroll scheduling isn’t one size fits all. You should evaluate biweekly pay for yourself and see if it makes sense for your company’s needs.

Want to learn all about Biweekly Pay? Try out our Pay Check Generator.