How to Create a Biweekly Pay Schedule - businessnewsdaily.com (2024)

What is a biweekly pay schedule?

A biweekly pay schedule is when a business pays wages every two weeks, often on Fridays. For example, if, in February 2024, your employees received their paychecks on Friday, Feb. 2 and Friday, Feb. 16, you paid them biweekly.

There are four weeks in a month, so biweekly pay schedules usually result in two employee paychecks per month but can occasionally result in three per month. For example, if you paid employees biweekly in March 2024, your biweekly paydays might have been March 1, March 15 and March 29.

How do you create a biweekly pay schedule?

Payroll software is the best tool for creating a biweekly pay schedule. To set up a biweekly pay schedule with payroll software, follow these simple steps:

1. Log in to your account.
2. Go to your payroll interface.
3. Select the option to add a pay schedule.
4. Select “biweekly,” and apply this setting to applicable staff members.

What’s the difference between biweekly and bimonthly pay schedules?

Biweekly pay schedules are frequently confused with semimonthly pay schedules, which issue payments twice a month. Semimonthly pay is often called “bimonthly,” but that’s not technically correct. Bimonthly actually means every other month, while semimonthly means twice a month.

Although biweekly and semimonthly pay schedules both often result in two payments per month, these schedules differ in the following key ways:

• Day of the week: Biweekly pay schedules result in paychecks every two weeks, almost always on the same day of the week. Semimonthly pay schedules result in two monthly payments, but they aren’t always on the same day of the week. For example, if you pay your employees semimonthly on the 15th and 30th of the month, you could wind up scheduling payments on a Wednesday and a Thursday.
• Number of monthly paychecks: Biweekly pay schedules can lead to three employee paychecks in certain months. However, semimonthly pay schedules always result in two employee paychecks per month.
• Number of paychecks per year: Because there are 52 weeks in a year, biweekly pay means 26 employee paychecks per year. And because there are 12 months in a year, semimonthly pay means 24 employee paychecks per year. Consequently, biweekly checks may contain a slightly smaller amount than semimonthly checks.

Are biweekly pay schedules best for hourly or salaried employees?

While a biweekly pay schedule is a popular option for businesses with various employee categories, some employers choose to pay hourly and salaried employees on different pay schedules. For example, they might pay hourly employees weekly and salaried employees biweekly for the following reasons:

• Paying hourly employees weekly helps lower-wage hourly employees increase their cash flow.
• Weekly pay schedules may make it easier to track hourly employees’ overtime pay.
• Salaried employees can typically wait longer for their wages, which tend to be higher, so paying them biweekly makes sense.

Still, some experts say it’s best to implement a biweekly pay schedule for all employees, whether hourly or salaried, because it’s easier for a business to track. However you decide to pay your team, payroll software makes it easy to implement the best pay schedule for your needs, particularly if your payroll service allows unlimited runs without additional fees.

How do you calculate biweekly pay for hourly and salaried employees?

Biweekly pay calculations are typically easy for both hourly and salaried employees, especially with payroll software. However, it’s important to note the following distinctions when you calculate payroll for both employee categories.

Calculating biweekly pay for hourly employees

Follow these steps to calculate biweekly pay for hourly employees:

1. Pull each employee’s total hours worked during the biweekly pay period from your time sheets or time clock.
2. Incorporate paid vacation hours or other paid time off (PTO).
3. Add this time to the employee’s hours worked during the pay period.
4. Multiply this sum by the employee’s hourly wage. The result is your employee’s gross wages for the period.
5. Deduct applicable withholdings to arrive at the employee’s net wages. This number is what you’ll ultimately pay the employee.

Calculating biweekly pay for salaried employees

Follow these steps to calculate biweekly pay for salaried employees:

1. Check your payroll software to confirm the employee’s salary.
2. Because there are 26 biweekly pay periods in a year, divide this salary by 26. The result is the employee’s gross wages for the pay period.
3. Deduct applicable withholdings to arrive at the employee’s net wages. This is what you’ll pay them.

The pros and cons of biweekly pay

Biweekly pay is popular because of several crucial advantages for employers and employees. However, it’s not suitable for every business. Consider these pros and cons.

Biweekly pay schedule pros

Paying your staff biweekly brings the following benefits:

• Predictability: When you choose biweekly pay, you’ll know you must run payroll every two weeks. Because biweekly paychecks traditionally arrive on Fridays, you’ll also know that you must run payroll far enough in advance to make this Friday deadline. Your employees will also receive paychecks at regular, predictable intervals, which can help them budget.
• Easy overtime calculations: Admittedly, calculating overtime in biweekly pay schedules is more challenging than for weekly pay. However, compared with semimonthly pay, biweekly pay makes overtime calculations much easier. You’ll just need to check an employee’s overtime hours for two consecutive workweeks and then factor them into your calculations. Semimonthly pay periods can split workweeks into two pay cycles, thus complicating overtime calculations.
• More paychecks for employees: Biweekly pay schedules result in more paychecks per year than semimonthly schedules do. The result for employees is a stronger cash flow that’s ideal for paying bills, affording groceries and saving for retirement. When you choose biweekly pay, you’ll likely make your employees happier than with semimonthly pay.

Biweekly pay schedule cons

Some employers may opt for other pay schedules because of the following disadvantages of biweekly pay:

• Variable pay dates: While biweekly pay results in paychecks every other Friday, dates aren’t automatically ascribed to paychecks. Semimonthly pay means a paycheck on the 15th and the 30th, though these dates must be changed if they fall on weekends or bank holidays. Still, semimonthly pay dates can make it easier to plan when to process payroll.
• More payroll costs: Biweekly pay schedules may incur additional costs because some payroll services charge fees for each payroll run. If so, semimonthly or monthly pay schedules may make more sense because you’d run payroll less often and lower your costs.
• Complicated deduction calculations: During months when biweekly pay results in three paychecks, splitting monthly deductions among those checks can be challenging. You’ll have to divide the total monthly deduction by three, not two, and that’s easy to forget. In contrast, semimonthly and monthly pay schedules result in predictable, consistent deductions per paycheck, saving you stress and reducing the potential for human error.

Which industries and business sizes use which pay schedules?

According to the Bureau of Labor Statistics (BLS), as of February 2023, 43 percent of private businesses paid their employees biweekly, making it the most popular option across all industries. Here’s how other pay schedules measure up:

• Weekly: Data showed that 27 percent of businesses — particularly construction, trade and manufacturing employers — opt for weekly pay schedules.
• Semimonthly: Semimonthly pay is the schedule of choice at 19.8 percent of companies, and it’s nearly as common as biweekly in the financial industry.
• Monthly: Some financial, professional, educational, health and leisure services pay monthly, but this is the least-common pay schedule, with only 10.3 percent of businesses using this option.

Organization size often correlates with pay schedule choice. According to the BLS data, the prevalence of biweekly pay increases with a company’s number of employees. Interestingly, 24.1 percent of companies with fewer than 10 employees pay weekly, compared with 39 percent that pay biweekly. Companies with 10 or more employees most often pay biweekly.

Best payroll software for managing biweekly pay schedules

The best payroll services can streamline your biweekly pay calculations and ensure employees are paid accurately and on time. Consider the following well-regarded options:

Intuit QuickBooks Payroll

Intuit QuickBooks Payroll is an excellent choice for businesses, particularly if your company already uses QuickBooks Online for accounting. Pricing plans vary and can accommodate simple or robust payroll needs. Each payroll plan includes unlimited payroll runs, automatic tax forms and free next-day direct deposit. In fact, setting up QuickBooks Payroll direct deposit is exceptionally straightforward.

Here are some of our favorite features in QuickBooks Payroll:

• Easy payroll customization: QuickBooks Payroll makes it easy to customize your payroll frequency. Select “Add pay schedule” from the payroll platform, and choose your pay frequency. You can opt for weekly, biweekly, semimonthly or monthly payments and edit your preferences as needed.
• Automated functions: You can set the software to automate tax withholdings and wage garnishments. You can also automate payroll runs for salaried employees using direct deposit.
• Payroll reporting: You can run and print customizable payroll reports to gain insight into payroll deductions and contributions, payroll tax liability, time activities, vacation and sick leave, and workers’ comp.
• Robust support: All plans include product support and expert troubleshooting help via phone or chat. Mid- and top-tier plans offer 24/7 support with additional video support options.
• Team tools: The QuickBooks Workforce app allows your team to view their W-2s and track their payments on the go.

Our detailed QuickBooks Payroll review details pricing and integrated platform benefits, including optional health benefits via Allstate and 401(k) plans, that make payroll deductions easy.

Gusto

Gusto was designed for small and midsize businesses and offers an intuitive and comprehensive payroll solution. Here are some Gusto payroll features that impressed us:

• Unlimited payroll runs: You can run payroll as many times as you need per month, with no extra charge, on the schedule that works best for your business.
• Easy payroll runs: Payroll runs are easy and take just minutes; you can also automate payroll via Gusto’s Autopilot feature to save time.
• Compliance guidance: Gusto’s platform displays requirements for pay frequency in your state so you’ll comply with local regulations. Additionally, Gusto’s built-in compliance features help your business stay current on local worker regulations, like meal and rest break laws for hourly workers.
• Flexible payroll settings: Choosing payroll frequency is a breeze. From Gusto’s platform, select “Add a new pay schedule,” and choose weekly, biweekly, semimonthly, monthly, quarterly or yearly. You can opt to have each employee on the same cycle or differentiate by compensation type, employee type or department. You can also preview your pay settings before running payroll to ensure accuracy.
• Payroll taxes: Gusto calculates local, state and federal payroll taxes and files them with the correct government agency. This service is included in all payroll plans at no extra cost.
• Integrations: The Gusto payroll platform seamlessly integrates your employees’ health insurance, 401(k) plans, PTO and more. It also integrates with various third-party HR platforms.
• Support for multistate and international businesses: The platform has excellent options for businesses that must pay workers in another state or country. Gusto supports state tax registration in all 50 states and contractor payments for international workers in more than 120 countries.

Our comprehensive review of Gusto outlines this platform’s costs and additional features.

OnPay

OnPay is an easy-to-use and affordable payroll platform for startups and small businesses. It handles payroll taxes and employee benefits deductions. With 30 years of payroll experience, OnPay is a trusted solution to ensure your employees are paid accurately and on time. Here are some standout features:

• Unlimited payroll runs: OnPay offers unlimited payroll runs. This flexibility is ideal for businesses that frequently run payroll off-cycle or want to customize their payroll schedule.
• Pay schedule flexibility: With OnPay, it’s easy to choose different pay schedules. From the dashboard, expand the Next Scheduled Pay Run tile and select Add New. Choose from weekly, biweekly, semimonthly or monthly pay periods, or create multiple pay frequencies for different employee types. You can also choose starting and ending pay period dates and edit the schedule anytime.
• Payroll reporting: OnPay’s report designer generates customizable payroll reports to help you analyze payroll data.
• Accuracy tools: Automated workflows and compliance checklists ensure accuracy. The service also guarantees accurate calculations for local, state and federal taxes.
• Integrations: OnPay offers various integrations with other HR tools to help you manage all HR workflows in one platform.

Our OnPay review highlights the platform’s onboarding support, robust customer service and intuitive interface.

ADP Run

ADP Run is a trusted, scalable solution that automates payroll processing and tax filing, taking the stress out of payroll management. It offers various tiered plans that allow you to choose the level of service that fits your business needs.

The following ADP Run features are particularly helpful for small businesses:

• Flexible payroll scheduling: Choose weekly, biweekly, semimonthly or monthly payments, and use the scheduling tool to set your preferred schedule. The scheduling tool includes all federal holidays, helping you plan your payroll. It’s also easy to set up multiple pay schedules depending on the department or employee type.
• Multiple payment options: You can issue payments via direct deposit, printed payroll checks or pay cards.
• Employee self-service: Employees can use a mobile app to view their pay stubs, manage direct deposits, change their 401(k) contributions and download tax forms.
• Additional services: ADP handles local, state and federal tax filings. It also calculates retirement and benefits withholding, ensures compliance with tax regulations in all 50 states, and checks your payroll with an artificial-intelligence-powered error-detection system to avoid costly mistakes. The service can create, deliver and file W-2 and 1099 forms on your behalf.

Read our ADP Run review to learn about scaling this service to include other ADP offerings, such as hiring and team management tools.

Payroll software makes biweekly payments easy

Implementing a biweekly payment schedule can be a win-win for businesses and employees, particularly when employers use a reputable payroll service to ensure accurate and timely payroll cycles. As you research payroll software, you’ll almost certainly find a convenient and affordable option to support your biweekly pay schedule and take the stress out of payroll.

Max Freedman contributed to this article.