What Are the Benefits of a Bi-Weekly Payroll?
The most common payrolls are weekly, biweekly, semimonthly and monthly. A weekly payroll occurs every week; biweekly, every other week; semimonthly, twice per month; and monthly, once per month. Many employers choose a biweekly payroll, which occurs 26 times per year, because of its many advantages.
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Easy to Understand
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Biweekly employees receive payment every other week, such as every other Friday. The sequence of payment is easy to understand, as opposed to a semimonthly payroll. A semimonthly payroll usually happens on the 15th and on the last day of the month. The pay dates may fall on various days of the week, including weekends, in which case the employer changes the payday to the preceding or following business day. This pay schedule can be difficult for employees to keep up with. A biweekly payroll lets employees know precisely when they will get paid--every other week on the exact same day.
Simplifies Processing
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A biweekly payroll is simple to process because it revolves around a set time frame. This is particularly true when processing pay for hourly workers, who are paid according to hours worked during the pay period. A semimonthly payroll may have fewer days in one pay period than in another, but a biweekly payroll always consists of 10 business days. Therefore, if an hourly employee always works a set 40-hour workweek, all the payroll representative has to do is make sure he receives 80 hours each pay date. But if he's semimonthly, although he works the same amount of hours each day, his total hours for the pay period may fluctuate because the amount of days in the pay period does not stay constant.
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Minimizes Document Filing
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A biweekly payroll requires less payroll report filing than a weekly payroll. This cuts down on the confusion that can arise from having too much paper trail. The U.S. Department of Labor requires employers to keep payroll records, such as time cards, wages paid and deductions withheld, for nonexempt workers. At the end of each biweekly payroll, the payroll representative can print and file payroll registers, which includes earnings and deductions, for two weeks. A weekly payroll would require printing and filing payroll registers every week.
Substantial Paycheck
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An employee's weekly paycheck for two weeks most likely equals what she would have been paid if she were paid biweekly. Still, some employees prefer to receive one large paycheck biweekly instead of two smaller paychecks weekly. A larger paycheck enables them to pay multiple bills simultaneously and may leave extra for other purposes.
Simplifies Check Reconciliation
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A biweekly payroll simplifies the check reconciliation process because there are fewer checks (than a weekly payroll) to track. Since checks are issued on a less frequent basis, a biweekly pay period can also result in fewer employees losing checks. This reduces the need to issue replacement/manual checks, which can complicate the reconciliation process.
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References
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