How to Set Up a Biweekly Payroll Period
Along with ensuring that their employees are paid accurately and timely, employers have to determine their pay frequency. The most common pay schedules are weekly, biweekly and semi-monthly. A biweekly pay date occurs every two weeks. Employers often choose to pay their employees biweekly because this is one of the easiest payrolls to implement and maintain.
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Instructions
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Determine your actual pay date. Your biweekly pay date can occur on whichever day you choose; however, most employers use every other Friday as their pay date because it is simple to remember and calculate.
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Figure the pay-period dates for your biweekly payrolls. The pay-period dates are the time frame the employees are being paid for. To allow enough time for payroll processing, many employers pay biweekly employees with a week's lag. Example: if your pay date is Friday, January 22, 2010, your pay period dates will include the two weeks prior to that week---Sunday, January 3, 2010, to Saturday, January 16, 2010.
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Implement a set date for weekly time sheets to be submitted. Hourly employees are generally required to submit time sheets and are paid based on what the time sheets reflect. You can create a written policy, stating that managers/supervisors or employees must have their time sheets submitted by Monday mornings at 9 a.m.
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Ensure that your payroll system is set up to pay salaried employees a full 80 hours each pay date. Salaried employees are normally paid a set wage each pay date; therefore, you will have to make sure each salaried employee's biweekly pay is precoded in the system so that it occurs automatically every payroll processing. With most payroll software, all you have to do is enter the pay frequency (biweekly) and the employee's annual salary, and the system will calculate how much he should be paid each pay date. If you are figuring by hand, calculate based on the following example:
$60,000 (salary) / 26 pay periods = $2307.69 biweekly pay -
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Ensure that all hours, taxes and deductions are based on a biweekly pay date. If an hourly employee's timesheet reflects 40 hours each week, he should be paid for 80 hours each pay date. Salaried employees will always be paid 80 hours each biweekly pay date.
Biweekly employees' taxes are computed based on two weeks of pay. Employer and employee tax deposits and filings must be submitted according to your IRS requirements.
Deductions such as medical and contributions such as 401(k) are calculated based on biweekly earnings. Example: an employee elects to contribute 5 percent of his gross pay to his 401(k). If his biweekly salary is $1,500, calculate his 401(k) contributions as follows:
$1,500 x 5 percent = $75 to be deducted from biweekly paychecks
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