How to Create a Biweekly Pay Schedule

Biweekly pay describes paychecks that arrive every two weeks, resulting in 26 paychecks per year.
Biweekly pay differs from semimonthly pay, which is issued twice per month and 24 times per year.
Whether or not you should use biweekly pay varies based on many factors, but a payroll software is always the best way to implement it.
This article is for small business owners interested in setting up a biweekly pay schedule.

Think back to when you were an employee rather than a small business owner. As you toiled away at your tasks, you might have occasionally reminded yourself that it was all worth it to get paid every two weeks. That last part is key – every two weeks. Many small businesses pay their employees every other week, on a biweekly pay schedule. Read on to learn how you can implement and administer this schedule for your business.

What is a biweekly pay schedule?

A biweekly pay schedule is the payment of employee wages every two weeks, often on a Friday. For example, if, in October 2021, your employees received their paychecks on Friday, Oct. 8 and Friday, Oct. 22, you paid them biweekly.

There are four weeks in a month, so theoretically, biweekly pay schedules result in two employee paychecks per month. In reality, biweekly pay schedules can occasionally result in three employee paychecks per month. If your first payday of the month was Dec. 1 instead of Dec. 8, your biweekly paydays would have been Dec. 1, 15 and 29. That's three paychecks in a month on a biweekly pay schedule.

Key Takeaway FYI: Biweekly pay schedules result in employee payments every two weeks, but in some months, that means three paychecks.

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

Biweekly pay schedules can easily be confused with another popular pay schedule: semimonthly. Semimonthly pay is often referred to as "bimonthly," though that's not technically correct. As you can see from the definition of "biweekly," "bimonthly" would mean every other month, while semimonthly means twice a month.

Because semimonthly pay means paychecks twice per month, and biweekly pay schedules often result in two paychecks per month, these pay schedules may seem like the same thing. However, as the above example shows, biweekly and semimonthly aren't quite the same. They differ in these three key ways:

Biweekly pay schedules result in paychecks every two weeks, almost always on the same day of the week. Semimonthly pay schedules result in two payments per month, not necessarily on the same day of the week. Let's say you pay your employees semimonthly on the 15th and 30th of the month, meaning you could wind up paying them on a Wednesday and a Thursday.
Biweekly pay schedules can lead to three employee paychecks in certain months. However, semimonthly pay schedules always lead to two employee paychecks per month.
Because there are 52 weeks in a year, biweekly pay means 26 employee paychecks per year. Since there are 12 months in a year, semimonthly pay means 24 employee paychecks per year. Consequently, biweekly checks may contain a slightly smaller amount of wages than semimonthly checks.

Editor's note: Looking for the right payroll system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Are biweekly pay schedules best for hourly or salaried employees?

You may wonder if biweekly pay schedules are appropriate for both hourly and salaried employees. Most payroll and HR experts would agree that biweekly pay is a great choice for salaried employees. Opinions may differ on whether biweekly is suitable for hourly employees.

Some experts argue that weekly pay schedules help hourly employees better track how much overtime they worked in a week. These experts might also say that weekly pay is better for low-wage employees, as low wages paid biweekly can prove burdensome to one's cash flow. With weekly access to cash, low-wage employees may have an easier time paying bills and thus avoid harsh late-payment penalties.

However, other experts would say that biweekly pay schedules should still be your go-to for your hourly employees because it's easier for your business to track.

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

Biweekly pay calculations are typically easy for both hourly and salaried employees. Even if they were difficult, your payroll software would automate them for you. Follow these steps to calculate biweekly pay for hourly employees:

Pull the employee's total hours worked during the biweekly pay period from your timesheets or timeclock.
Make sure to incorporate any paid vacation hours or other paid time off.
Add this time to your employee's hours worked during the pay period.
Multiply this sum by the employee's hourly wage.
The result is your employee's gross wages for the period. Make sure to deduct any withholdings to arrive at the employee's net wages. This number is what you'll ultimately pay the employee.

How do you calculate biweekly pay for salaried employees?

Follow these three steps to calculate biweekly pay for salaried employees:

Check your payroll software to confirm the employee's salary.
Since there are 26 biweekly pay periods in a year, divide this salary by 26.
The result is the employee's gross wages for this paycheck. After deductions, you'll be left with net pay, which is what you actually pay.

Tip Tip: Visit our reviews of the best payroll software to learn more about how payroll software can streamline your biweekly pay calculations. You can also learn about one of the best services in our ADP payroll review.

Which industries and business sizes use which pay schedules?

The U.S. Bureau of Labor Statistics (BLS) found that, as of February 2020, 43% of businesses paid their employees biweekly. This figure makes biweekly pay the most popular option across all industries.

The BLS has found that construction, trade and manufacturing employers often pay weekly. In fact, across all industries, 33% of businesses pay weekly. Semimonthly pay is the schedule of choice in 19% of companies, and it's nearly as common as biweekly in the finance industry. Some financial, professional, education, health, and leisure services pay monthly, but this is the least prevalent pay schedule, with only 4.7% of businesses using this option.

Organization size may more closely correlate to pay schedule choices. The February 2020 BLS data shows that the prevalence of biweekly pay increases with a company's number of employees. Interestingly, though, 34.9% of companies with under 10 employees pay weekly as compared to 33.7% that pay biweekly. Companies with 10 or more employees most often pay biweekly. Learn more about all the different options when it comes to payroll frequency.

Key takeaway: Biweekly pay is the most common pay schedule, but some small businesses and a handful of labor-intensive sectors opt for weekly pay instead.

The pros and cons of biweekly pay

When a practice is popular with small businesses, it's probably quite advantageous to employers. This notion holds true with biweekly pay. However, it's not without its imperfections.

Here are some reasons why you may choose to pay your staff biweekly.

Predictability: When you choose biweekly pay, you'll know that you need to run payroll every two weeks. Since biweekly paychecks traditionally arrive on Fridays, you'll also know that you must run payroll far enough in advance to hit this Friday deadline. Your employees will also receive paychecks at regular, predictable intervals, which can help them budget.
Easy overtime calculations: Admittedly, biweekly pay schedules could make for more challenging overtime calculations than weekly pay. Compared to semimonthly pay, though, biweekly pay makes overtime pay a cakewalk. You'll just need to check an employee's overtime hours for two consecutive workweeks, then factor these into your calculations. Semimonthly pay periods can split workweeks into two different pay cycles, thus complicating overtime calculations.
More paychecks for employees: For employees, biweekly pay schedules result in a greater number of paychecks per year than semimonthly schedules. The result 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.

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

Variable pay dates: Sure, biweekly pay results in paychecks every two Fridays, but this fact doesn't automatically ascribe dates 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. Even with this need, you may still find these dates easier for planning when to run payroll.
More payroll costs: With the increased employee cash flow of biweekly pay schedules can come more costs for you. That's because, with some payroll services, you'll pay fees every time you run payroll. If your payroll service charges these fees, you might feel inclined to opt for semimonthly or monthly pay schedules instead. This way, you run payroll 2-14 fewer times than with biweekly pay and lower your costs.
Complicated deduction calculations: During months when biweekly pay results in three paychecks, splitting monthly deductions among these checks can be challenging. You'll have to divide the total monthly deduction by three – not two – and that's easy to forget. Semimonthly and monthly pay schedules instead result in predictable, consistent deductions per paycheck, saving you stress and reducing the potential for human error.

What are the best solutions to implement a biweekly pay schedule?

Generally speaking, the best way to start paying your employees biweekly is through payroll software. Setting up a biweekly payroll schedule on these platforms is typically easy. You'll log into your account, go to your payroll interface and look for an option to add a pay schedule. You can then indicate which of your employees you'll pay on this timetable. Assuming that you pay all your employees biweekly, you can apply this schedule to your entire staff.

However, some employers may pay certain employees biweekly and others weekly. For example, you could pay your hourly employees weekly and your salaried employees biweekly. This approach is far from unheard of, and it helps lower-wage hourly employees increase their cash flow. It does so while minimizing the potential costs of also running weekly pay runs for salaried employees, who can often wait longer for wages since they tend to be higher.

Either way, payroll software is the easiest way to run a biweekly payroll schedule. This notion is especially true if you choose software that allows you to run payroll an unlimited number of times without additional fees. In our OnPay review, we found the company never charges fees when you run payroll, no matter how many times you do so. As you research payroll software, you'll almost certainly find an option that's both convenient and affordable for starting – and maintaining – biweekly pay.