Everyone wants to get paid. But when you get paidcan matter nearly as much as what you get paid.
Pay cycles are the foundation for budgeting and financial planning — both for employees and employers. Weekly and biweekly are the most common options. While weekly pay happens more often, biweekly offers larger paychecks. Weighing the pros and cons of both can help you decide which you prefer.
Here’s a guide to weekly versus biweekly pay and the advantages of each pay cycle.
What is a pay period?
A pay period is the time between paychecks. During this period, an employer calculates and disburses employee wages for the work each person performs. Lengths vary depending on the company's policies, but common options are biweekly (every two weeks), semimonthly (twice a month), or monthly.
What is weekly pay?
So, how does weekly pay work? It’s a compensation system that pays employees every seven days, resulting in 52 paychecks per year. This gives people more frequent payments, but they are usually lower than they would be if they were biweekly or monthly.
Pros and cons for the employer
Pros
- Builds trust. Weekly pay fosters a sense of trust and mutual understanding between employers and employees. Workers can count on receiving their wages promptly. And acknowledging great work with frequent pay goes a long way toward improving the owner-worker relationship.
- Improves morale. Regular weekly pay boosts employee morale and satisfaction. Having regular access to earned pay helps people feel appreciated and financially secure.
Cons
- Increases administrative costs. Processing payroll every week takes time and resources, which may lead to higher administrative costs. It could also lead to higher fees for payroll management software and related services.
Pros and cons for the employee
Pros
- Covers immediate expenses. Weekly pay gives people frequent access to funds, making it easier to cover immediate expenses like bills, groceries, and transportation.
Cons
- Offers smaller amounts of money. Despite the more frequent paydays, weekly pay results in lower amounts, which can make it harder for people to budget for longer periods or pay large bills. This is the top disadvantage of getting paid weekly.
What is biweekly pay?
Biweekly pay periods work by cycling every two weeks. Checks usually come every other Friday, but it depends on the company. This makes for 26 paychecks per year, or two per month — though twice a year, a month has three paychecks.
Pros and cons for the employer
Pros
- Saves time. With fewer pay runs throughout the month, biweekly pay lessens the administrative burden on employers. It streamlines the payroll process and cuts the time it takes in half compared to weekly pay.
Cons
- Can affect staff morale. Some employees may view biweekly pay as less convenient than weekly pay, potentially impacting morale if they prefer more frequent checks.
Pros and cons for the employee
Pros
- Is the norm. Many employees are used to biweekly pay because it’s so common in most industries.
- Offers a consistent income. Biweekly pay provides employees with a consistent and predictable income schedule, especially compared to less frequent options like monthly or semimonthly.
Cons
- Requires better budgeting skills. The main disadvantage of getting paid biweekly is that you get paid less often. People may need stronger budgeting skills to manage their expenses and make their income last until the next payday.
4 other payroll options
If a weekly or biweekly payroll schedule doesn’t align with your needs, here are some alternative options:
1. Semimonthly pay
With semimonthly pay, checks come twice a month, typically on the 15th and the last day of the month. Employees get 24 paychecks every year. This option provides a compromise between weekly and biweekly pay frequencies, offering regular paydays while reducing the administrative burden associated with weekly payroll processing.
2. Monthly pay
Employees receive their wages once a month, typically on the same day every time. While less common, monthly pay can simplify payroll processing for employers. It’s just harder for employees to budget and make their pay last a whole month.
3. Variable pay
Some businesses offer variable pay arrangements, where employees get compensation based on specific metrics or performance targets. This option can boost productivity and align compensation with business goals, like more sales. But this approach requires careful planning and communication to make sure everything’s clear and employees are all on the same page.
4. Customized payroll schedule
Employers can also create custom payroll schedules tailored to everyone’s needs and preferences. This approach allows for more flexibility, but it can also get complicated. Employees and employers both have to accommodate factors like cash flow, budgeting, and taxes.
How to choose the best pay period
If you’re a business owner deciding how often to pay your staff, consider these points:
1. Cash flow
Assess your company's cash flow situation to decide how frequently you can afford to pay your employees. Weekly or biweekly pay periods may be more manageable for businesses with steady cash flow, and monthly ones might work better for those with more variable income streams.
2. Legal requirements
Familiarize yourself with any legal requirements or regulations about payroll frequencies in your jurisdiction. Some countries or states have specific laws dictating how often you have to pay employees. Failing to comply with these regulations could result in penalties or legal consequences.
3. Employee preferences
Think about what your staff might prefer. Some employees like more frequent paychecks to help with budgeting and managing expenses. Others may prefer less frequent payments for simplicity and predictability. When in doubt, ask, or look at what similar companies are doing. Earned Wage Access may be another innovative feature to explore.
4. Budgeting considerations
Pay periods impact your employees' budgeting habits and financial stability. Biweekly or semimonthly pay periods may balance regular income and budgeting, while monthly pay periods offer more money but require more careful planning. Again, it never hurts to ask what your staff prefer.
5. Operational efficiency
Evaluate how different pay periods could impact your company's administrative processes and operational efficiency. Consider your resources and decide which pay frequency aligns best with your operational needs and efficiency goals.
Weekly pay periods require more frequent payroll processing and administrative tasks, like calculating hours and processing payments, which increases the workload for your HR or payroll team. On the other hand, monthly pay periods streamline payroll processing and reduce administrative overhead so your team can focus on other tasks.
Empower your workforce with EWA
Considering a switch to more frequent paychecks to help your employees manage finances? While that's an option, there's a simpler way: Earned Wage Access (EWA).
Earned wage access, also commonly known as on-demand pay, allows employees to access a portion of their earned wages before payday. This employee benefit can alleviate financial stress by providing workers with immediate access to their earned money when they need it most.
Here's why EWA is a win-win for both businesses and employees:
- Reduced financial stress: an employee might need money for gas or groceries between paychecks. EWA provides them with the flexibility to access their earned wages for those immediate needs, reducing financial stress and worry.
- Improved productivity: Less financial worry can lead to a more engaged and productive workforce.
- Attracting and Retaining Talent: EWA is a valuable perk that can set your company apart in a competitive job market.
- Maintains Payroll Efficiency: Unlike more frequent paychecks, EarnIn’s zero integration EWA solution doesn't disrupt existing payroll process
By offering EWA, companies can meet the financial needs of their workforce and foster a more productive work environment. Learn more about EarnIn’s zero integration EWA solution and how you can offer it as a benefit to employees.
