When it comes to finances, people tend to have differing opinions on which payroll schedule is the best. It all comes down to personal preference. If an individual is seeking to receive paychecks on a more frequent basis, a bi-weekly payroll schedule is typically what is sought after.
However, it may not be for everyone. To know if this type of payroll is right for you, it is important to understand the potential benefits and challenges that go along with it. But first, let’s go over all the different time frames for which you can be paid:
Generally Accepted Pay Schedules
Daily: Every day
Weekly: Every Thursday
Bi-weekly: Every two weeks on the same day
Semi-Monthly: 1st and 15th
Monthly: Once a Month
Quarterly: Once Every 3 Months
Semi-Annually: Once Every 6 months Annually: Once a Year
The Definition of Bi-Weekly
When a company has this option for payroll, each employee will receive their paycheck on the same day every two weeks.
Typically, with a bi-weekly payment schedule, there are two paydays per month. Sometimes a month will have five Mondays resulting in three paychecks per month.
The Benefits of a Bi-Weekly Pay Schedule
In all fairness, budgeting can be challenging at times. When you need to budget the entire month’s worth of finances, things can get tricky with surprise expenses.
If an individual has a bi-weekly pay schedule, they’ll have the opportunity to adjust their finances accordingly if a surprise were to occur. We all know these unfortunate scenarios—your car breaks down, there is a water leak, need to take the family pet to the vet, etc.
If someone has already budgeted their monthly paycheck and something happens, it is going to throw off their whole system. Some other key benefits include:
- Bi-weekly payments can help prevent overspending during the time between paychecks and help avoid financial ruin.
- This schedule can prevent issues with debt management or budgeting as they do not need to plan as many days ahead as opposed to monthly payments.
- More paychecks on a more frequent basis means that they can continually pay down credit rather than once per month.
- Having a two-week pay period will grant them a better understanding of what will be needed throughout the month.
Some Downsides to This Pay Schedule
This is typically viewed by individuals who do not consider themselves, “good at not over-spending.” More cash flow coming in every two weeks can entice anyone to spend more than they should if their budgeting skills are not practiced.
Monthly pay allows for that individual to properly manage their finances and allocate their money accordingly. Whereas bi-weekly pay could allow someone to make bad financial decisions more easily.
Some more potential challenges include:
- More pay days equals more responsibility for the payroll department. Properly calculating paystubs twice, sometimes thrice, per month can be a daunting task. You need a sophisticated Paystub Generator to do the work for you.
- Without the proper tool of an accurate paystub generator, tax deductions can be a formidable adversary. The more check stubs you generate, the more you will have to calculate.
A Bi-Weekly Pay Schedule Can Work for You
How you wish to either pay your employees or be paid as an employee is reliant on these traits. A bi-weekly payroll schedule can be beneficial to employees and employers, but it can also pose some challenges.
Utilize Check Stub Maker’s easy-to-use, advanced paystub generator to help make a bi-weekly pay schedule work for you.