Comparing Weekly and Bi-Weekly Pay for Employees and Employers

Network—For many niche professions or industries, there are professional organizations or trade associations that help their members network. Location—Different locations will have different supplies and demands for positions, and average salaries in each area will reflect this. Keep in mind that the cost of living should be noted when comparing salaries. In some cases, a job that offers a higher salary may equate to less overall once the cost of living of a different location is accounted for. Age—A person closer to their peak income years, which is 40-55, will generally have higher salaries.

• Most payroll and HR experts would agree that biweekly pay is a great choice for salaried employees.
• If your employer does not have direct deposit available, then you will be paid with a paper check.
• This is particularly helpful for those who live paycheck to paycheck and need the money as soon as the check doesn’t arrive.
• Generally, bi weekly pay schedules offer employees and independent contractors the opportunity to receive paychecks on a more frequent basis.
• Industry—Industry affects wages paid, even in similar roles.

After knowing the differences between semi-monthly vs bi-monthly payroll cycles, businesses and employers can make a choice between the two. Businesses consider various factors that help them to decide between the two options. It is prudent to go through the pros and cons of both options, weigh both of them, and then, finally decide which payroll options are best suited for their purposes. If an employee is earning $50,000 every year and is getting paid as per a semi-monthly pay schedule, he will get a paycheck of $2,083.33 gross. This amount is derived by dividing fifty thousand dollars by 24 as there are two pay cycles every month.

Weekly Pay Periods:

And, employees might not be sure which day they get paid. Knowing the difference between biweekly vs. semimonthly payroll can prevent financial setbacks, keep your business legally compliant, and more. In the U.S., salaried employees are also often known as exempt employees, according to the Fair Labor Standards Act . This means that they are exempt from minimum wage, overtime regulations, and certain rights and protections that are normally only granted to non-exempt employees. To be considered exempt in the U.S., employees must make at least $684 per week (or $35,568 annually), receive a salary, and perform job responsibilities as defined by the FLSA. Certain jobs are specifically excluded from FLSA regulations, including many agricultural workers and truck drivers, but the majority of workers will be classified as either exempt or non-exempt.

According to the Bureau of Labor Statistics, 43% of employees are paid biweekly. On the other hand, only 19% of employees are paid using the semimonthly payroll frequency. If you run a biweekly payroll, employees receive their wages the same day each pay period.

Semi-monthly Pay Periods:

Semimonthly pay is the schedule of choice in 19% of companies, and it’s nearly as common as biweekly in the finance industry. Some financial, professional, education, health, and leisure services pay monthly, but this is the least prevalent pay schedule, with only 4.7% of businesses using this option. Payroll processing for semi-monthly salaried employees differs from payroll processing for biweekly salaried employees. Full semi-weekly salaried employees receive payment for 86.67 hours each pay period. The significant difference between getting paid twice in a month (semi-monthly) and getting paid every two weeks (bi-weekly) is the pay period.

5Up to two days early is based on comparison with traditional banks. Exact timing is dependent on your employer’s payroll policies. For more information on eligibility and requirements of Earnin Express, visitEarnin.com/TOS. 3Tip Yourself Account funds are held with Evolve Bank & Trust, Member FDIC and FDIC insured up to $250,000. Other restrictions and/or third party fees may apply, see earnin.com/privacyandterms for details.

What Are the Types of Payment Methods I Can Use for Payroll?

Those types of workers benefit from the increased stability, and can use automated software to make invoices or generate pay stubs to further simplify the process. Employers typically issue checks on the 1st and 15th of the month, or the 15th and the last day of the month. You do have the option of scheduling recurring payments on any two dates in a month that are spread equally apart.

But for businesses who hire employees full-time, it could become an unnecessary extra cost and job to implement bi weekly pay. The primary distinction between the two payment schedules is that bi weekly works well and has several https://personal-accounting.org/ advantages for hourly employees and those who work overtime. Employees receive more pay checks during the year than semimonthly, even if those paychecks are slightly lower than they would be on a semimonthly schedule.

Based on our data, most employers believe more frequent pay periods are the best option. Performance Reviews—Most employers give out annual performance reviews to their employees. Annual reviews that are, for the most part, positive are generally followed by an annual pay raise. If no raise is given, even after a glowing review, it may be in the employee’s best interest to ask for a salary increase or begin considering other employment options. Most employers (over 75%) tend to provide vacation days or PTO for many beneficial reasons. As an aside, European countries mandate that employers offer at least 20 days a year of vacation, while some European Union countries go as far as 25 or 30 days.

• Generally speaking, the best way to start paying your employees biweekly is through payroll software.
• Then, the modern system came into effect into the 1930’s with the advent of social security and payroll taxes.
• Explain the benefits, to the business and to the employees, of the biweekly schedule so that the staff understands the rationale for the change.
• Appreciating their differences will help you make an informed decision, so you have no regrets for tomorrow.
• Opinions may differ on whether biweekly is suitable for hourly employees.
• There are several differences between both pay periods.

6Your Max on Earnin Express is up to 80% of your payroll or $1000, whichever is less. The 80% is dependent on you routing your full paycheck to Earnin Express. Depending on some factors, they may fall on different days of each month. It could be on a Wednesday, Thursday, Monday, Friday, or any other day of the week. That being said, there are a couple of disadvantages to this type of pay schedule as well – and this article will certainly cover those, too. If an employer chose to pay semi-monthly, they may do so on the first and fifteen or fifteenth and thirtieth of each month . Some employers may opt to pay you immediately, especially if you have been fired, regardless of the law in your state.

Benefits for Employees

For instance, the District of Columbia has the highest rate of all states at $16.50 and will use that figure for wage-earners in that jurisdiction instead of the federal rate. On the other hand, Georgia has their minimum wage rate set at $5.15, but the $7.25 federal minimum rate overrides it. Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee if you get paid every two weeks benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media. Payroll From year-end reporting to employee paystubs, check out these payroll tips and tricks. Make sure to incorporate any paid vacation hours or other paid time off.

• Reduced payroll frequency, however, interferes with employee happiness, which can cost a significant amount in lost productivity and engagement over the long run.
• Many employers practice this type of pay period that you are experiencing.
• Depending on where you live, your state may make this decision for you and provide guidelines for the type of payroll schedule you need to follow.
• Biweekly pay and semimonthly pay can be confusing because employees generally receive two payments per month.
• Until then, you’ll have to make due with relying on your employer to offer it as a perk or signing up for an earned wage benefit service yourself.
• From an efficiency perspective, the main point is to avoid weekly payrolls in favor of either of the methods presented here, thereby cutting the total number of payrolls in half.