Should you opt for Biweekly Pay ? A Complete Guide for Employers

As an employer, you can choose from several payment schedules to pay your employees. However, in the US, the biweekly mode of payment is by far the most common. It means issuing your employees their paychecks every other week on a particular day, such as Monday. You will also need to build their paystub online (or on paper) to reflect this information.

From hospitals to hotels, tech companies, and daycare facilities, many sectors use biweekly pay. Education centers like colleges and marketing agencies also prefer this model. Typically, industries such as health, education, information, and hospitality have adopted biweekly pay as their standard in the US. In this article, let us discuss the nuances of this popular payment schedule, including its benefits and shortcomings.

Should you switch to Biweekly Pay from a Bi-monthly Schedule?

If you follow a bi-monthly payment system in your company, your staff gets paid twice a month. It sounds like the same thing as biweekly pay since a month has an average of four weeks. However, a bi-monthly paycheck comes on a fixed date each month. So, for instance, if the 1^st happens to be a Sunday, the checks will have to be disbursed one day in advance (or later).

In contrast, a biweekly check will make it to the account on a fixed day every other week. It is straightforward and eliminates the confusion about weekends disrupting the payment.

Advantages of Biweekly Pay

Here are the main benefits you can expect with this payment schedule:

1. Makes employees feel secure

Biweekly pay ensures that an employee will receive their paycheck on the same day every other week. It helps them feel secure and lets them plan their expenditure accordingly. If you use a bi-monthly schedule, the day might change if it lands on the weekend. Yes, you can pay your employees a day early in this case. Many employers even launch a policy that clarifies this situation. But even so, the security of biweekly pay beats this scenario.

2. Simplifies calculations for finance and HR teams

A biweekly payment schedule makes things much simpler for payroll calculation compared to a bi-monthly or other system. It is easy to generate and distribute the paychecks and also straightforward to factor in overtime. If you use a free check stub maker with calculator, it further reduces the probability of errors in payroll processing.  

3. Helps in planning a budget

When your employees get paid on a fixed day every other week, say, Friday, they can plan out their expenses effectively. It is easier than having to plan for every 15 days or so. The human brain processes a specific day better than an amount of time.

4. Cuts costs of payroll provider

If you decide to switch to a biweekly system from a weekly schedule, the number of runs reduces. You will have to incur lower costs on your payroll provider service.

Drawbacks of Biweekly Pay

These are the main shortcomings of a biweekly payment schedule:

1. Not suitable for all industries

A biweekly payment routine has several advantages for both the employees and the HR or payroll teams. But it may not be suitable for every industry. If your business operates with several contractual workers, they may appreciate weekly payment for a feeling of security.

2. Likely to increase spending

Studies suggest that getting paid every other week encourages spending. Employees tend to feel that they have better access to money. They are encouraged to up their spending compared to what they would on a monthly payment schedule.

The negative impact of this pattern is that it creates a low period between two paychecks. If an employee has a large payment to make or a time-sensitive bill to clear in this period, it can become a pain point. Over time, this situation can subconsciously make a job switch seem tempting.

3. May make bookkeeping complicated

While using a biweekly schedule, you will have to account for the months that have three pay periods instead of two. It can make bookkeeping trickier and more time-consuming, especially at the beginning.

Creating Paystubs for Biweekly Payment

Paying your team every other week does have many advantages over a monthly system. But it does affect the task of generating paystubs. It is sensible to use an automated payroll software application to keep things streamlined. You can also use an online paystub generator. StubCheck.com offers regular and enhanced paystubs to factor in varying pay schedules. Entrusting a paystub maker to create payment records for your employees decreases the time and effort of your payroll team. It is also an intelligent way of eliminating errors.

Selecting a payment schedule is a crucial decision for any business. When making this choice, consider the size of your workforce and the costs you are willing to set aside for payroll. It is also wise to assess what your competitors are doing to arrive at the perfect system for you.