What is Biweekly pay?
Biweekly pay is the concept of paying your staff every two weeks on a specific day of the week. Due to the fact that payday happens every two weeks, some months will have three pay checks. If the majority of your employees are hourly, biweekly payroll can be beneficial.
Shortly, Biweekly pay means that you pay your staff every two weeks, as the name implies. A pay schedule/period will frequently reoccur within a specific timeframe and will not change until a new pay cycle begins.
How biweekly pay is calculated?
A salaried employee's biweekly pay is calculated as a percentage of his or her annual wage. Divide the annual salary by 26 because there are 26 biweekly pay periods in a year. For instance, if the annual salary is $52,000, the biweekly compensation is $2,000 every week. This sum is sometimes referred to as the base salary.
What are the benefits of Biweekly pay?
Understanding the advantages of a biweekly pay schedule might assist you in determining which frequency is ideal for your company and employees. Consider the following benefits of a biweekly pay schedule:
1. Minimises processing time
Calculating regular and overtime earnings, salaries, and, if applicable, supplemental compensation like as commissions, bonuses, and overtime pay are all part of payroll processing. Calculating deductions such as payroll taxes, voluntary deductions, and wage garnishments are also included. With each payment cycle, taxes and perks must be accounted for. This might be a time-consuming operation depending on the size of the payroll.
Employers who pay employees biweekly income rather than weekly must conduct payroll only once every two weeks. This effectively cuts the time spent on payroll run processing in half. Payroll errors are also less likely with biweekly processing.
2. Often saves money
Payroll service providers are used by many employers to process their payroll. The supplier usually charges a set price for processing, although there may be additional fees for each direct deposit transaction and live check issue, as well as courier service.
A biweekly pay rather than a weekly pay saves money on supplier fees and might amount to a significant savings depending on the stages involved in a company's payroll.
3. Shorter paper trails
Employers must comply with payroll record-keeping rules enacted by the federal government. Many businesses print and file payroll registers at the end of each payroll cycle, which list each employee's payroll data for the weekly pay period. This includes how wages were paid and what deductions were made. Despite the fact that payroll software can save payroll data for several years, many firms require paper copies to maintain a dependable filing system. Employees are paid bimonthly rather than weekly, which means fewer paperwork to file and more storage space.
4. Easier reconciliation
A weekly payroll necessitates the employer going over all of the checks issued each week and balancing them against those that are still pending. There are fewer live checks issued on a biweekly pay check, which means fewer checks to track. It may help reduce the number of stolen and lost checks.
Difference between biweekly and semi-monthly pay
As we have learnt in the start, what is biweekly pay? Let's have a look at the difference between a semi-monthly and a biweekly payroll. The difference between biweekly and semi-monthly pay is that the former is paid 24 times a year, while the latter is paid 26 times a year. A semi-monthly payroll is paid twice a month, on the 15th and last days of the month, in most cases. If one of these pay dates comes on a weekend, the payroll is distributed on the Friday before. Every other week, on a Friday, a biweekly payroll is paid.