What is Biweekly Pay?
Biweekly Pay is a payment system that pays employees every other week on a specified day of the week. There are benefits to both employees and employers when it comes to utilizing biweekly pay. For employees, biweekly pay results in a consistent paycheck with a predictable payment schedule. For HR, the biweekly pay is an efficient and fast system with minimal room for errors when using a software solution such as PrimePay.
Over 36% of businesses in the United States use biweekly pay. Industries that benefit the most from biweekly pay include retail, healthcare, and hospitality. Before deciding on a payroll schedule, you must ensure that you adhere to specific state payday requirements as the payment frequency may differ depending on the state.
The difference between biweekly and semi-monthly pay periods lies in how often payment dates occur. Pay dates for biweekly pay occur every two weeks, while semi-monthly pay is paid out twice a month, such as every 5th and 20th of the month. Biweekly pay is more advantageous for businesses such as those with hourly and salaried employees. However, it is vital to go through all aspects before deciding on a biweekly pay schedule.
Some of the drawbacks of biweekly pay include increased administrative costs and the possibility of experiencing a cash-flow burden from the biweekly pay schedule requirement. Biweekly pay does not affect tax liabilities as taxes are based on the total amount earned in a year rather than the paycheck’s frequency.