General Question

pleiades's avatar

What is the benefit to companies which pay bi monthly vs every two weeks?

Asked by pleiades (6566points) July 29th, 2014

I’m so used to getting paid every two weeks.

What’s the difference between getting paid every 4th and 19th vs getting paid every two weeks?

Who does this benefit? It is all relative and equal?

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12 Answers

ragingloli's avatar

Is 2 times a month not 2 weeks?

livelaughlove21's avatar

I got paid on the 15th and 31st of the month when I worked at a bank. The benefit is that every few months you’ll get a paycheck with three weeks of pay on it. That was really it – it all evens out to the same thing. It’s better than getting paid monthly.

@ragingloli Erm, no. Some months have more than four Fridays, meaning people getting paid bi-weekly will get three paychecks and the bi-monthly people still only get two paychecks.

syz's avatar

It’s all about accounting. We switched so that our profit and loss statements would be accurate.

dabbler's avatar

Accounting. (I see @syz has typed the same thing, yep…)

Every two weeks has a small advantage when there is a lot of worker turnover. Most people will quit at the end of a week. Weekly is a common payroll period in this case.

Twice a month is more synched up with monthly accounting reports. Also it lets the company use the payroll $$ just a little bit longer, at least in the company’s interest-bearing account, and possibly in more fruitful investments.

livelaughlove21's avatar

I just realized you were asking about the benefit to the company, not the employees. My bad.

LuckyGuy's avatar

In addition to the above it saves on payroll preparation expenses. Bimonthly means they collect timecards, record data and issue checks only 24 times per year. Every 2 weeks means they must do it 26 times per year. That is 8% fewer submissions and checks to write. Payroll preparation fees are decreased proportionately.

We pay (and are paid) once per month..

Bill1939's avatar

A payroll will issue 24 checks per employee per year when paying twice a month, but paying every other week will require 26.5 checks be issued. If one is being paid for the number of hours worked during the pay period, the employee is not being disadvantaged and, as other here have pointed out, it makes an accountant’s life a little easier.

SQUEEKY2's avatar

Thanks for the great answers guys, I have always wondered about this myself. :)

ARE_you_kidding_me's avatar

Yup, you’ll lose those magic months.

Cruiser's avatar

Bi monthly benefits the company as it is 2 less payrolls and will save on the fees for those 2 payrolls.

RedKnight's avatar

I was paid bi-monthly and can attest to the above. The only employee benefit however are the awesome three week paychecks you get ever so often. It’s nice to see that bump in finances every once in a while!

LuckyGuy's avatar

There is a benefit for the employee. Automatic bill payment can be arranged easily. Most bills are due monthly, e.g. mortgage, utilities, water, etc. The automatic payments can be set up to lag the known pay check payment dates. Set it up once and you never have to think of it again.

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