Employers who produce payroll calendars make budgeting easy for employees, and they simplify matters for their payroll processor as well. This way, employees know exactly when the company deposits their earnings in bank accounts. According to the U.S. Bureau of Labor Statistics, more than one-third of private sector employers pay their employees ever two weeks, or biweekly. Employees know that a paycheck will come every 14 days.
How Many Paychecks
A biweekly payroll schedule is comprised of 26 pay dates – there are 52 weeks each year, thus every other week means an employee receives 26 paychecks in a year's time. The pay is generally the same for every pay period, which is unlike a semi-monthly pay schedule where the number of days in a pay period might range from 10-to-12, for a five-day workweek, Monday through Friday. A semi-monthly pay schedule is 24 checks per year. That said, where there is a biweekly pay schedule, there are two months where employees receive three paychecks, but for each of the remaining 10 months, employees receive two paychecks.
When Is Payday?
Some companies pay biweekly Fridays. Whether you count a workweek from Sunday-through-Saturday, or Monday-through-Sunday, paying biweekly provides at least four business days within which to process and distribute paychecks. For example, if your organization begins its annual pay calendar on January 1, 2020 (the January 1 date is required, since earnings are reported to the IRS for the January 1-through-December 31 calendar year), the first pay period for that year would likely be Monday, January 1- through-Sunday, January 12, with the first payday of 2020 being Friday, January 17, if you don't hold back two weeks' pay, meaning you're paying on an on-time schedule.
If your organization holds back, say, one pay period, then the first pay period of the year would be paid to employees on January 31, 2010, which means your payroll is one pay period in arrears. That gives the payroll department January 13-through-January 30 to process payroll for distribution on Friday, January 31, 2020. Alternatively, if your organization does not hold back one pay period, the pay period January 1-through-January 12, gives the payroll department January 13-through-January 16 to process pay for distribution on Friday, January 17, 2020.
Publish Pay Schedules in Employee Handbook
A convenient way for employers to provide the answer to often-asked questions about payday is to create a calendar. A pay schedule calendar helps employees budget their expenses. Also, a calendar is useful when payday falls on a holiday so employees know when to expect their paychecks. In this case, employers generally pay the day before a federal holiday when banks are closed. A pay schedule could be inserted in the employee handbook and updated each year.
Using the same example, for employees who receive biweekly paychecks on the third Friday of the year (2020), tracking their pay schedule is as easy as circling every other Friday after January 17, or January 31, 2020. This way, budgeting for regular expenses is simple. If there's a large expense that has to be split across two paychecks, it can probably be covered within a two-week period. One of the most important questions asked by new employees (and even by some candidates before they join the company) is payday frequency and when can they expect to receive the first check. For new employees, their start date might depend on the first payday, particularly if they are leaving a current employer and trying to calculate their final pay and budget expenses for that time.