What Is Bi-weekly Payroll And How Does It Work?

What is bi-weekly payroll?

Bi-weekly payroll is a payroll system where employees are paid every two weeks, typically on consistent days such as every other Fridays or every other Thursday. In this system an employee receive 26 paychecks in a year.

How does biweekly payroll work?

Biweekly payroll work by paying employees every 2 week typically on a predetermined day like Friday. here’s how the process unfolds:

Schedule determination: the employer works with employee in scheduling the bi-weekly pay periods usually starting from the beginning of the year. For example: the pay period may start from the Monday of the year and employee are paid every other Friday.
Hour tracking: Employees record the number of hours worked during each bi-weekly period. Employee can use time tracking tools, time cards, or other hr software to calculate employee working hours.
Pay calculation: At the end of each pay period employers calculate the number of hours each employee has worked and their pay rate. this include overtime pay for hours worked beyond standard hours.
Deduction and taxes: deductions such as taxes, retirement contribution, health insurance and any other deduction are deducted from gross pay to calculate the net pay.
Payment distribution: Employees receive their paycheck on the designated payday usually on every ither Friday or another pre determined day.
Yearly Adjustment: Since there are 52 weeks in a year the employee receive 26 paycheck in a year and there may be two months in which employees receives three paycheck instead of the usual two.

What Are the Benefits of Biweekly Pay?

Biweekly pay offers many benefits to both employer and employee:

Bi-weekly payment provide employee with regular and predictable payment making it easier for them to budget and plan their finances
Bi-weekly payment help employers to reduce the frequency of payroll run compared to weekly or semi-monthly pay schedules. Thereby saving time and resources in payroll processing.
With fewer payrolls run employer save money on processing cost associated with the payroll administration such a printing and distributing paychecks or managing direct deposit.
Bi-weekly pay align with labor law and regulation making it easier for employer to calculate overtime wage.
Bi-weekly pay often coincide with financial expenses such as monthly bills, making it easier for employees to manage their finances.

Difference between Biweekly and semi-monthly pay?

Aspect	Bi-weekly Pay	Semi-monthly Pay
Frequency	Paychecks issued to employee every two weeks	In semi-monthly pay paychecks is issued twice a month
Pay Periods	26 pay periods per year	24 pay periods per year
Payday Consistency	Consistent day of the week (e.g., every Friday)	Consistent dates (e.g., 15th and last day)
Calculation Ease	Simple calculation based on hours worked	Can be more complex due to varying workdays
Overtime Handling	May result in more frequent overtime calculations	Overtime calculations might be less frequent
Budgeting	Paychecks may vary slightly in amount	Paychecks are usually consistent in amount
Cash Flow	Provides a more even distribution of payroll expenses throughout the year	Payroll expenses might be more concentrated around paydays
Employee Preference	Some employees may prefer the more frequent pay schedule for better cash flow management	Some employees may prefer the consistency of semi-monthly paychecks

Potential challenges of bi-weekly pay

Some of the challenges with bi-weekly pay are:

Some employees may find cash flow shortages between pay periods particularly if they have irregular expenses or unexpected bills.
Employers may find it challenging to budget their bi-weekly payroll during months with three pay periods which can affect cash flow planning and budget allocation.
Bi-weekly pay requires more frequent payroll processing compared to semi-monthly or monthly schedules. As a result it may increase administrative cost if the payroll provider charges per payroll run.
Bi-weekly pay are calculated based on hours worked which makes it challenging to predict their incomes accurately.

Does Biweekly Pay Affect Taxes?

Bi-weekly doesn’t directly affect the taxes but it can influence the timing of tax withholding and the calculation of certain tax-related items.

Bi-weekly may result in smaller withholding amounts per paycheck compared to the more frequent ones but the amount withheld over the course of the period be the same at the end.
Bi-weekly doesn’t change the reporting requirement but it may affects the amount reported for each pay period.
Certain tax credits and deductions such as Earned Income Tax Credit and retirement plan contribution are based on annual income. So, the timing of the contribution to these deductions through bi-weekly contribution may affect the timing of tax deduction and retirement savings.

How Is Biweekly Pay Calculated?

Bi-weekly pay is calculated absed on the hours worked during the bi-weekly period and their hourly rate or salary. here’s how:

Hourly Employees:

Determine the number of worked by employee during the bi-weekly period inclduing overtime hours worked.
Now multiply the number of hours by the employee regular hourly rate. this gives the employee regular pay for that period.
Overtime is calculated at 1.5 times the employee regular hourly rate for each overtime hour worked.
Now combine the regular pay and overtime pay to get the employee bi-weekly pay.

Salaried Employees:

For salaried employees divide the annual salary by the number of of bi-weekly pay periods (Typically 26) in a year.
example: employee with fixed salary of 26,000 will get a paycheck of around $1000 bi-weekly since Gross salary is = 26000/26

How many hours in bi weekly payroll?

The number of hours depend on the employer standard workweek and overtime worked by employees. In a typical scenarios standard working hours is 40hours, so the total number of hours in a bi-weekly pay period would be 80 Hours (40 Hours per week * 2 weeks) assuming employee work regular full-time hour and no overtime.

If employee work overtime then total number of hours would be the sum of regulars hours worked plus any overtime hours worked. Using the example above if employee worked 5 hours of overtime in a week and 10 hours in the following week then the total number of hours for the bi-weekly pay would be 95 Hours (80 hours+ 5 hours + 10 hours).

How many biweekly pay periods in 2024?

To determine the number of bi-weekly pay periods in a year, we need to know how many weeks are in the year and then divide that number by 2 since each pay period covers two weeks.

In 2024:

There are 52 weeks in a year.
Therefore, there are 52 / 2 = 26 bi-weekly pay periods in 2024.

So, there are 26 bi-weekly pay periods in the year 2024. Since 2024 is a leap year there’s 2 additional days remaining outside of those pay periods.