Understanding Bi-Weekly Payroll: An Ultimate Guide

Key Takeaways

Bi-Weekly Bliss for Payroll Peace: Bi-weekly payroll simplifies pay scheduling, ensuring consistent pay periods and ease of calculation, making it a popular choice for businesses aiming for efficient payroll management.

Fabulous Fortnightly Financials: Employees enjoy regular paychecks every two weeks, which helps with personal budgeting and financial planning, providing a steady income flow to manage monthly expenses smoothly.

Streamlined Salary Calculations: With bi-weekly payroll, determining pay is straightforward due to consistent pay days and periods, reducing administrative burden and the potential for payroll errors.

When it comes to payroll cadence, bi-weekly payroll is a popular choice among businesses.

Here I’ll dig into how it works as well as the benefits, challenges, and best practices.

What Is Bi-Weekly Payroll?

Bi-weekly payroll means employees are paid every two weeks, typically on the same day of the week (like every other Friday). This results in 26 pay periods per year (sometimes 27, depending on the calendar).

The bi-weekly approach is one of the most popular pay schedules, adopted across various industries due to its balance of frequency and manageability. 

According to the BLS, the most common industries which use bi-weekly pay are education and health services, leisure and hospitality, and information.

How Does Bi-Weekly Payroll Work?

Biweekly payroll works by paying employees every two weeks, typically on the same day of the week. For example, if payday is Friday 1st, employees get paid on the 1st, 15th, 29th, etc.

For hourly workers, pay is simply hours worked over the two-week period, including any overtime (overtime is easy to track since each pay period covers exactly two 7-day weeks).

For salaried employees, their annual annual salary is divided by 26 to get each paycheck amount.

Let’s say a salaried employee earns $52,000/year:

• $52,000 ÷ 26 = $2,000 per paycheck

Difference between bi-weekly and semi-monthly pay 

Bi-weekly, as mentioned, means that you pay employees every two weeks. This can happen on a day of the week of the companies choosing.

Semi-monthly pay simply means twice per month. This sort of pay usually occurs on the first and the fifteenth of each month, meaning paydays are irregular and pay periods may vary in length depending on the month.

Benefits of Bi-Weekly Payroll

Bi-weekly payroll is popular because it has a few benefits for both employers and employees:

Benefits for employers:

1. Simpler overtime tracking (for hourly workers): Since it's based on weeks, it's easier to calculate overtime by the standard 40-hour workweek (workers appreciate this too).
2. Consistent processing schedule: Payroll always falls on the same day of the week (e.g., every other Friday), making it easier to manage.
3. Employee satisfaction: More frequent paychecks can lead to happier employees, especially hourly staff.

Stay up-to-date on all things HR & leadership

Get weekly insights and how-tos on leadership and HR’s biggest and most pressing topics—right to your inbox.

Your email*

By submitting this form, you agree to receive our newsletter, and occasional emails related to People Managing People. You can unsubscribe at any time. For more details, please review our privacy policy. We're protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Comments

This field is for validation purposes and should be left unchanged.

Benefits for employees

1. More frequent paychecks: Getting paid every two weeks means less time between paydays, which is great for budgeting and cash flow.
2. Predictable weekday paydays: Pay always lands on a specific weekday, avoiding confusion around different dates like with semimonthly.
3. Occasional "extra" paycheck: In months with three pay periods (usually twice a year), employees enjoy a bonus-feeling extra paycheck.

Challenges of Bi-Weekly Pay

While bi-weekly pay has its perks, it also comes with some administrative and budgeting challenges for employers.

Uneven months = accounting complexity

Some months will have three pay periods instead of two. This can throw off monthly budgeting and forecasting, especially for things like salary expense, benefit deductions, and cash flow.

Benefit deduction complications

Most benefits (like health insurance) are based on a monthly schedule. You’ll need to decide whether to:

• Prorate deductions over all 26 pay periods, or
• Skip deductions during the two “extra” paychecks per year.

Author's Tip

To make it easier to reconcile monthly amounts for the benefits, only deduct over 24 paychecks instead of 26. As it’s pretty easy for most payroll software to block the deduction from the third payroll, the third payroll feels especially good for everyone!

More payroll runs

26 vs. 24 pay periods means more admin time or processing fees if using a payroll provider.

Communication challenges

Employees may be confused about why their paycheck amount looks different (especially during months with a third paycheck or no benefit deductions).

Minor employee challenges too

Pay dates shift slightly each month (e.g., Friday the 5th this time, Friday the 3rd next), which can make budgeting harder for people who prefer consistency.

Some banks or landlords prefer payments aligned to calendar dates, which semi-monthly provides.

How Is Biweekly Pay Calculated?

For hourly employees

Hourly employees are paid based on the number of hours they work within a pay period, typically two weeks in the case of bi-weekly pay. The calculation for their pay is straightforward:

1. Track hours worked: Record the total hours worked in the two-week pay period. For example, if an employee works 80 hours in two weeks (40 hours per week), this becomes the basis for the calculation.
2. Multiply by hourly rate: Multiply the total hours worked by the employee's hourly wage.

Example:

• Hourly rate: $15.00 per hour
• Hours worked in the two-week period: 80 hours
• Pay calculation: 80 hours × $15.00 = $1,200

So, the hourly employee would earn $1,200 for the two-week pay period before payroll taxes and other deductions.

For salaried employees:

Salaried employees are paid a fixed amount per year, which is then divided into pay periods. 

Since there are 26 bi-weekly periods in a year, the salary is divided by 26 to determine the bi-weekly pay amount.

1. Annual Salary: Identify the annual salary of the employee.
2. Divide by 26 Pay Periods: Divide the annual salary by 26 to find the bi-weekly pay.Example:
   • Annual salary: $52,000
   • Pay periods in a year: 26
   • Pay calculation: $52,000 ÷ 26 = $2,000

Therefore, the salaried employee will earn $2,000 every two weeks before taxes and deductions.

Does Biweekly Pay Affect Taxes?

Bi-weekly pay doesn’t change how much tax workers owe overall, but it can affect how their paychecks are taxed per period.

Here’s what that means:

Workers are still taxed based on their total annual income, regardless of how often they’re paid.

However, since their per-paycheck income is smaller (compared to semi-monthly), the withholding per paycheck may differ slightly.

Some employees might see minor fluctuations in take-home pay due to IRS rounding or how benefits/deductions are handled across 26 vs. 24 periods.

Best Practices for Implementing Bi-Weekly Payroll

As you put a bi-weekly pay cadence in place, there are few practices that will ensure a smooth transition and help your organization meet any compliance requirements as you scale. 

• Training and Education: Educate HR staff and employees about payroll management and tools.
• Regular Audits: Conduct audits to ensure accuracy and compliance.
• Software Selection: Choose a payroll software solution that fits the business size and needs. Any payroll software costs are justified if the right tool leads to fewer payroll errors.
• Standardized Process: Follow a payroll processing step-by-step guide to ensure accuracy.
• Refer to Reliable Resources: The Department of Labor has created wage and hour guidelines for a variety of industries to use as a reference for compliance.
• Give people time to adjust: Whenever making changes to the pay cycles, ensure workers are given at least 2 months notice to make any adjustments (and keep reminding people every 1-2 weeks).

How To Choose The Right Payroll Cycle

Choosing between bi-weekly and semi-monthly, or monthly payroll depends on your team’s needs, your financial processes, and how your payroll system handles deductions and pay cycles.

Here’s a quick guide to help you decide what works best for your organization.

1. How do your employees prefer to be paid?

• Bi-weekly: Predictable weekday pay (e.g., every other Friday), slightly more frequent cash flow
• Semi-monthly: Paydays like the 15th and last day — consistent dates, but weekdays vary.
• Monthly: One paycheck per month, usually on the last day or a fixed date (e.g., the 1st or 30th).

If your team is hourly or prefers regular weekday pay, bi-weekly usually wins. If your team is salaried and prefers a simple schedule, monthly can work well.

2. How are your benefits and deductions structured?

Are premiums billed monthly?

• Monthly and semi-monthly cycles make it easier to split or apply deductions evenly.
• With bi-weekly, you’ll need to adjust for months with 3 paychecks—either skipping deductions or prorating them across 26 periods.

3. What kind of payroll system are you using?

• Some systems easily handle 26 (bi-weekly) or 24 (semi-monthly) periods.
• Others default to monthly, especially in global payroll setups.
• If you're outsourcing, check if your provider charges per pay run—fewer runs (like monthly) = potential cost savings.

4. Are most employees salaried or hourly?

• Salaried employees adapt well to monthly, semi-monthly, or bi-weekly.
• Hourly employees may benefit more from bi-weekly, since it aligns with hours worked and overtime tracking.

Bi-weekly Pay Schedule for 2025

Here are the bi-weekly pay dates for 2025, assuming the first paycheck is issued on Friday, January 3, 2025, and paydays fall every other Friday:

1. January: 3, 17, 31
2. February: 14, 28
3. March: 14, 28
4. April: 11, 25
5. May: 9, 23
6. June: 6, 20
7. July: 4, 18
8. August: 1,15, 29
9. September: 12, 26
10. October: 10, 24
11. November: 7, 21
12. December: 5, 19

Subscribe To The People Managing People Newsletter

Want to learn more about all things payroll? Subscribe to our weekly newsletter for HR and business leaders. You'll get all our latest insights to help you progress in your career and make greater impact in your org.