What is biweekly pay? Calculation + Pros & cons

Biweekly pay is a common compensation schedule, and for good reason. Employees get 26 consistent payments throughout the year, and this rhythm makes automated payments and other accounting processes easier.

Biweekly payroll helps employees and their employers alike plan financially—with the confidence that they know exactly when each paycheck is coming in. Here’s a guide to the biweekly pay schedule and how to implement it at your company, even for global staff.

Pros and cons of biweekly pay schedules

Biweekly pay does have its pros and cons. While its consistency and simplicity are a plus, accounting teams might hit snags or see high payroll costs. Here’s what to know:

Pros

• Consistent paychecks: Employees receive compensation every two weeks, aiding in financial planning and budgeting compared to monthly payments.
• Simplified overtime calculations: Overtime pay is easier to calculate since it typically begins at the start of the week (usually Monday) and ends at the end of the week (usually Friday).
• Reduced payroll processing errors: Compared to weekly pay, biweekly pay reduces the chances of mistakes in payroll processing because it involves fewer pay periods to manage each year.

Cons 

• Complex bookkeeping: With two months having three pay periods, biweekly pay can be more complicated than semimonthly or monthly pay for accountants and business managers.
• Higher payroll costs: Payroll providers that charge per pay period may result in slightly higher fees compared to semimonthly payroll.
• Administrative overhead: The more frequent cadence of biweekly pay, compared to monthly payroll, can increase administrative overhead.

Biweekly vs. semimonthly payment schedules

As of 2023, 43% of American businesses pay employees biweekly instead of weekly, semimonthly, or monthly. 

Biweekly and semimonthly cadences can get confusing because both schedules pay employees approximately every two weeks. The difference is that biweekly pay happens every two weeks, and semimonthly pay happens twice a month. 

Semimonthly employees receive 24 equal payments per year, usually on the 15th and last day of the month. Biweekly employees receive 26 equal payments per year because there are 52 weeks. That means, for a couple of months out of the year, they get three paychecks instead of two. While someone’s annual salary stays the same with either option, they might prefer biweekly pay for the “bonus” paycheck.

How to calculate biweekly pay 

Hourly workers and salaried employees experience this pay cadence a bit differently. Here’s an example for each:

Hourly workers

Multiply the number of hours worked in the two-week pay period by the employee’s hourly rate.

For instance, if an employee works 80 hours in two weeks and has an hourly rate of $20, their gross pay would be $1,600.

Salaried employees

Divide the employee's annual salary by 26 to determine their biweekly gross pay.

For instance, if an employee’s annual salary is $52,000, their pay would be $2,000

Global payroll for international teams

No matter what cadence you choose, managing payroll for international teams is an extra challenge. Different rules, currency differences, and international laws complicate the process. The good news is that Oyster has your back.

Oyster's global employment platform handles payroll and benefits administration across multiple countries. Employees receive their pay accurately and on time, even from the other side of the world.

Streamline payroll management with Oyster today.