Billpaywiki.com – How does biweekly paychecks work? The pay schedule system could be confusing for some people. A company might apply a weekly pay, while others choose to issue the paychecks every month.
However, it’s just a small part of the more complex business world. Whether you are an employee or employer, it’s recommended to understand the whole system of these pay schedule differences.
In this article, we will explain about the biweekly pay, starting from its definition, how it works, and how to calculate the total earning with this schedule.
How Many Pay Periods in a Year Biweekly? Is it the Same with Semi Monthly?
What is Biweekly Pay?
Don’t you know that in the US, most states mandate a payment system to be either biweekly or semi-monthly? The biweekly system, as the name suggests, grants paychecks to the workers every 2 weeks. This is the most used pay cycle in the country along with the semi monthly.
With this schedule, you will receive 26 checks after the pay cycle ends in one year. It’s different than the semi-monthly pay with its 24 checks. How does biweekly paychecks work that it gives the workers 26 checks?
The answer is simple. One year consist of 52 weeks. If you receive 1 check per 2 weeks, you will get the total 26 check at the end of the cycle.
States like New Hampshire, Maryland, Maine, Iowa, and Indiana are some of the examples that instruct the bi-weekly system. This schedule is preferred because it’s not only beneficial for the workers, but also for business. The HR, particularly, will have an easier job as they spend less time calculating and processing the payroll compared to the weekly cycle.
How Does Biweekly Paychecks Work for New Employees?
A fresh graduate might be overwhelmed with all the types of pay schedule. The same can happen if you just start your job with a different payment system than the previous job.
In principle, there’s no different between biweekly pay for new employee and old employee.
- All employees will get 26 checks
- All employees will receive the total amount of money by multiplying the 26 checks with the amount of salary they get from each check.
- All employees will receive their earnings on the same dates that have been decided by the company.
For example, if you receive $2,000 per check, the total earnings that you collect in one year is 26 x $2000= $52,000. Each check will be delivered to the workers’ bank accounts on a specific day, such as each Wednesday per 2 weeks.
How Does Biweekly Paychecks Work in Small Business?
A small business can be defined as a business with revenue ranging from $1 million to $40 million. The number of employees usually starts from 100 to 1,500. As the number of capital, employees, and others are different than those in the big companies, managing a small business needs specific considerations.
When it comes to the pay schedule, many small business owners choose the biweekly system. This system is more efficient than the weekly system and generally less expensive than the semi-monthly. The company can give their workers 26 checks, so even though the total earnings are smaller, the workers can distribute their earnings evenly.
It’s stated that according to the US DOL (Department of Labor), the biweekly system is preferred among educational institutions, health service, hospitality, and information business.
There’s no fundamental difference between the biweekly system in small companies and big companies. It’s just that small companies usually like the biweekly system because it gives them some benefits.
How Does Biweekly Paychecks Work When You Quit?
You might start questioning about your unpaid salary if you quit the job with biweekly system. Some of you might even give 2 weeks’ notice before you leave so you can still get your full salary.
The same confusion could happen to employers. Should they pay the workers if they leave, even if they only work for 1 day before quitting?
In principle, employees should receive their salary even if they don’t work the full 14 days. The employers that force employees to leave as early as possible because they don’t want to pay the salary will have to pay for unemployment insurance. Meaning, that at the end of the day, they still have to pay their workers.
The final earnings should be granted according to state regulations. In general, if the workers give 2 weeks’ notice, final wages are given by the next pay day.
How to Calculate Biweekly Pay Hourly?
Calculating a biweekly hourly pay might not be necessary for full-time employees. But it’s a different story if you want to quit, or if you are an hourly worker (part-time employee). Unlike the full-time workers’, the amount of each check given to part-time workers is based on the hourly rate and the total hours worked in 2 weeks.
Here’s step by step to answer your question about how does biweekly paychecks work at an hourly rate:
- Collect all the information about your earnings, including the gross pay, net pay, and others.
- Get the total hours you work in 2 weeks. If you are a full-time employee, you usually work 40 hours in 1 week. For part-time workers, it depends on the contract.
- Divide the check you get with the total hours you work. For example, if you earn $1,800 gross pay and you work part-time for 32 hours a week, your hourly rate is ($1,800 : (32 x 2 weeks)) = 1,800 : 64= $28.215 per hour.
Biweekly Pay Calculator
Though it seems simple, the above calculation might be more complicated in real life. That’s why you have to really pay attention to the contract that you signed and the company’s regulations.
Some sites provide an automatic biweekly pay rate to help you understand your situation. You can use those sites to get the hourly rate, the total money that you collect in 1 year, and to calculate your payroll tax. However, you still need to get the information correctly. Any wrong information will end up with a wrong calculation even if you use an automatic calculator.
In the end, understanding the whole system of the biweekly pay schedule is really crucial. In fact, if you are a fresh graduate or a new business owner, you should really ask about how does biweekly paychecks work. Because it can affect many things, such as employees’ total earnings and the company’s work period.
