Comparing Weekly and Biweekly Pay for Employees and Employers - DailyPay (2024)

Payroll schedules must balance meeting employees’ expectations with protecting the company’s bottom line.

Pay frequency is a crucial aspect of employee compensation, impacting financial wellness and cash flow for both businesses and workers. The most common pay frequencies are weekly and biweekly.

According to the U.S. Bureau of Labor Statistics, biweekly pay is the most prevalent, with an estimated 43% of businesses using this method. This is followed by 27% opting for weekly pay, 19.8% semimonthly, and 10% monthly.

Biweekly and weekly pay schedules give employees more frequent access to their earnings, aiding in better budgeting and financial stability. For employers, choosing the right pay frequency can enhance employee satisfaction and retention.

The more frequently you run payroll at your organization, the more potential strain you may place on your payroll team. Higher frequency payroll can be more expensive, but the reduced frequency may interfere with employees’ expectations.

So, what’s the right balance? How do weekly and biweekly pay schedules compare from an employer and employee perspective?

An on-demand pay benefit to employees— also known as earned wage access — may be the best of both worlds for employers and employees because employees can be paid daily while the employer runs payroll biweekly or even less frequently.

What Are the Pros and Cons of a Weekly Pay Schedule?

Weekly Pay Schedule Pros

Increase employee morale: Are you looking for a way to improve employee morale? Giving your employees more frequent access to their earnings may be an incentive to improve attendance rates and increase productivity.

Flows better with hourly pay structure: Hourly employees may have inconsistent weekly work schedules that can include overtime. Weekly pay matches this inconsistent flow of work. If an employee works overtime one week and less than full-time the next, then weekly payroll ensures that the company pays the employee’s overtime faster.

It’s easy to get into a payroll flow: You can be more organized with weekly payroll. There is no confusion about when time cards need to be in or when payroll needs to be completed. You simply choose a particular day of the week and stick to it week in and week out. This goes a long way to ensure that the task is completed, without deviation.

Weekly Pay Schedule Cons

Expensive for businesses: Weekly checks can add an additional strain on payroll with increased costs.

Time-consuming for businesses: Payroll administration must account for more than just the weekly employee payments. It also includes the following:

• Wage garnishments
• Pay raises and pay cuts
• Sick pay
• Paid time off
• Taxes
• Other compensation-related issues

It’s time-consuming to track all of these items down. The more often you pay your employees, the less time you have for necessary administrative duties.

Aren’t sure what an on-demand pay benefit is? Need to find out more?

The Pros and Cons of a Biweekly Pay Schedule

Biweekly Pay Schedule Pros

Saves time: Paying employees biweekly instead of weekly requires an employer to process payroll only once every two weeks which reduces time spent on payroll processing and the likelihood of payroll errors, which can be equally time-consuming.

Simplifies Reconciliation: A weekly payroll means employees might not get around to cashing paper checks promptly. Tracking live outstanding checks can be a burden for payroll. A more frequent payroll can also make it more difficult to account for taxes so distributing taxes over a longer period lowers the possibility of paying the IRS for mistakes.

Saves money: If you use a payroll vendor, it’s likely they charge for each payroll run. If you have dozens of employees on weekly schedules, these fees can add up. Depending on the number of employees still receiving paper checks, payroll costs could also be significantly lower with biweekly pay.

Biweekly Pay Schedule Cons

Your employees are paid less frequently: Payroll is closely associated with the workplace’s morale. The more often employees see the fruits of their labor, the higher morale may be. Paying employees more often may also help alleviate financial burdens for employees.

So, What is the Happy Medium?

As you can see, there is a great divide. Biweekly pay is more convenient for employers because of the costs and time associated with running payroll. For some companies that still issue paper checks, this can mean a significant increase in payroll costs for printing and mailing. Weekly pay tends to be more beneficial for employees who want their money as soon as they earn it.

But what if a company could offer biweekly pay and still allow its employees to be paid as often as they’d like? Consider leveraging an on-demand pay solution, such as the one DailyPay offers, that allows your employees to be paid whenever they want without having to change your payroll processes and without adding additional administrative burden to your payroll team!

Want to learn more about how offering an on-demand pay benefit can help your company and your employees?