Get paid weekly or biweekly

Half-monthly vs. bi-weekly payroll - important differences

One of the first questions many new hires ask is how and when the company plans to pay them. Entrepreneurs can choose between weekly, biweekly, monthly or bi-monthly payroll plans. Organizations must select the option that best suits their employees' needs and aligns with the appointments of their payroll staff.

Of these options, bi-monthly and bi-weekly schedules are usually the most popular. Both bi-monthly and bi-weekly payroll offer different advantages and disadvantages for both employers and employees. Here are the differences and advantages of bi-monthly and bi-weekly payroll.

What is a bi-monthly schedule?

Employees who are paid twice a month have a semi-monthly pay plan. One check is sent at the beginning of the month, while the second is sent around the middle of the month. Semi-monthly wage plans are usually on the 1st and 15th or on the 15th and last day of the month. Employees receive 24 paychecks per year. Since some months are longer than others, paychecks vary in amount from checks from previous months.

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What is a biweekly payment plan?

Employees on a biweekly schedule receive a paycheck every other week, usually on a Friday. Those who are two weeks long get 26 paychecks a year. Employees receive the same wages for each check, while employees are paid per hour based on the number of hours worked.

What is the difference between a bi-monthly payment and a bi-weekly payment?

Employees receive a standard amount each year. These employees receive this standard amount regardless of whether they are on a bi-monthly or bi-weekly pay slip. However, the amount they get from each check can vary depending on what payment plan they are on. Those on biweekly schedules get paid more often, but at a lower amount for each check.

Let's look at an employee making an annual salary of $ 40,000 a year and see how they would be paid under any pay schedule.

Semi-monthly schedule The employee would receive a total of 24 checks. Each paycheck would be $ 1,666.66 before taxes are taken.

Biweekly Schedule The employee would receive a total of 26 checks. Each paycheck would be $ 1,538.46 before taxes are taken.

Different industries & pay schedules

According to the Department of Labor Statistics, 42.2% of businesses pay on a bi-weekly basis in the United States. Only 18% of companies pay on a bi-monthly wage plan. Other companies pay either weekly or monthly.

Sectors in which employees usually work irregular hours pay weekly. This typically includes construction, manufacturing, natural resources, and the mining industry. Weekly wage plans more closely reflect the cash flow needs of these workers.

Only 5.4 percent of companies send monthly checks. High-wage companies or financial service providers prefer the monthly wage cycles, since employees with high incomes can usually only be paid once a month.

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Semi-monthly wage benefits

1. Higher paycheck amount
Some employees prefer to receive a larger amount of money at less frequent intervals. This applies in particular if the employee has rent due at a certain point in the month or other planned expenses.

2. Same payment details
Knowing that a check will be delivered on the same day regardless of the month can be useful for budgeting purposes.

3. Inexpensive to the company
Half-monthly wage plans are more economical, as the company only has to do payroll accounting twice a month. It also creates less work for the payroll staff.

4. Easier to calculate deductions
It is easier to calculate the take-away pay when deductions are split evenly between two monthly checks. Since payment is always made on the same two days per month, the deduction amount will always be the same.

Two week payroll benefits

1. More consistency for
Employees Employees Employees know they have a paycheck every other Friday and the exact amount they are paid. Some bi-monthly payment days fall on a Saturday. Since Saturday is not a regular working day, employees can get confused about when to receive their check.

2. Bonus Pay Checks
Twice a year, employees on a biweekly schedule receive a third monthly check as there are 52 weeks per year. While this check is expected, it can be nice to manage cash flow and personal budgets.

3. Easier to calculate overtime wages
Overtime is determined by the number of overtime hours worked in a week. Bi-weekly wage cycles always cover two full weeks, and overtime is not split between two wage cycles, as can be the case with bi-monthly inspections. Therefore, it is easier for HR workers to calculate overtime for weekly paychecks.