One of the first concerns your new business is likely to face is pay period -- should you pay your employees weekly? Biweekly? Monthly?
Of course, you'll want to take into consideration both the needs of your employees, and your HR payroll administrators. In other words, what is the easiest system for your HR team to process, and what will make most of your employees happiest?
Biweekly is a good option to consider, and it's also the most popular option in the U.S. -- the U.S. Bureau of Labor Statistics reports 36.5% of private businesses have decided to use biweekly pay as their pay system of choice.
Biweekly is the most common option for a business's pay period in the U.S. Biweekly pay means you pay your employees on a set day once every two weeks, resulting in 26 paychecks per year. Because payday occurs once every two weeks, some months will have three paychecks. Biweekly can be helpful if most of your employees are hourly workers. Additionally, your employees will be happy to be paid more often (as opposed to monthly or semimonthly).
If you're wondering which pay period option is best to implement at your company -- or if you're just curious what biweekly pay entails -- keep reading.What Is Biweekly Pay?
Biweekly pay means you pay your employees once every two weeks, on a set day you choose.
For instance, let's say you choose to pay your employees once every two weeks, on Friday.
Take a look at the following calendar for the months of January and February, 2019:
Calendar courtesy of Towncalendars.com
As you can see, it doesn't matter which day of the month you pay your employees -- you can pay them on the 4th one month, and then the 1st another. It's only important you pay once every two weeks.
Once you start the year, you'll pay your employees once every two weeks. This might sound simple, but that means for two months out of the year, you'll have three pay periods instead of two.Pros of Biweekly Pay:
Ultimately, it's critical you consider what your competitors are doing, and what makes the most sense for your employees, when choosing a pay period. Your decision might vary depending on the size of your HR team, whether you can find a payroll provider with fair payroll fees, and whether your employees are salaried or hourly workers.
There will be 26 biweekly pay periods in 2019. Since biweekly means once every two weeks, you simply need to take the number of weeks there are in 2019 -- 52 -- and divide that number by two.
At first glance, these two terms sound awfully similar -- once every two weeks or twice a month are the same thing, aren't they?
Actually, they're not. Semimonthly means your employees get paid on two specific days of the month, regardless of when they fall. For instance, you might choose to pay your employees on the 15th and 30th of every month. Biweekly, on the other hand, promises employees a paycheck once every two weeks regardless of what day of the month it is -- hence, in the calendars above, employees receive paychecks on the 4th, 18th, 1st, and 15th of the month.
Semimonthly means employees receive 24 paychecks per year, instead of 26. Additionally, the 15th and 30th of each month could fall on a holiday or weekend depending on the month, so your HR team needs to ensure they're on-top of processing deadlines and pay dates to ensure your employees still receive a paycheck.
We just sent you an email. Please click the link in the email to confirm your subscription!
OKSubscriptions powered by Strikingly