August 13, 2024

What is Biweekly Pay and How Does It Work?

Imagine you’ve just landed a new job. (Congrats!) You ask about your pay, and your manager says you’ll get a biweekly paycheck.

But what is biweekly pay, exactly? Is it the same thing as getting a paycheck twice a month? And if not, what do you need to know so you can plan your budget accordingly?

What is biweekly pay and how does it work?

The “bi-” prefix can be a little confusing. A biannual event, for example, might happen twice a year or every other year.

But when it comes to payroll calendars, getting paid biweekly means just one thing: Your paycheck comes every two weeks. Most companies pay out on Fridays, but it can vary.

Biweekly payroll is pretty common, from big corporations to small businesses. Companies operating on this schedule run payroll every other week, cutting checks a total of 26 times throughout the year (52 weeks divided by two).

If you’re a salaried employee, you can calculate your gross biweekly earnings — which is what you make each pay period before taxes and deductions — by dividing your annual salary by 26. Let’s say your new job pays $50,000. And $50,000 divided by 26 is $1,923. That’s the pre-tax number you can expect to see on every paycheck.

If you’re paid hourly, predicting the amount on your next paycheck is as easy as multiplying your hourly rate by the number of hours you work in a pay period. Your employer should clarify the exact day the pay period ends, but it’s usually a few days to a week before payday. For example, if you make $20 an hour and work 80 hours across two weeks, your gross pay for the period will be $1,600 ($20 x 80 = $1,600), minus taxes and other deductions.

Biweekly vs semimonthly pay

Some people get paid once a week or once a month. But the two most common types of pay cycles are biweekly and semimonthly.

Getting paid semimonthly means you’ll receive a paycheck twice per month. Lots of people think of one month as four weeks, so it might seem like semimonthly and biweekly pay are more or less the same. But since every month but February has slightly more than four weeks, the math shakes out a little differently.

On a biweekly schedule, you can expect a paycheck on a consistent day of the week (usually Friday). But for semimonthly pay, payday falls on the same date, like the 15th and last day of every month, instead of the same weekday. People who get paid semimonthly receive 24 paychecks per year (12 months times two) instead of 26.

Semimonthly pay is generally more reliable because you know the exact date of every paycheck. But keep in mind that if your usual payday falls on a weekend or holiday, most companies will cut your check one business day prior.

If you make $50,000, here’s what each paycheck would look like based on the type of pay cycle your company uses:

Biweekly. $50,000/26 = $1,923 before taxes and deductions
Semimonthly. $50,000/24 = $2,083 before taxes and deductions

Semimonthly paychecks are a little bigger than biweekly, but a biweekly pay schedule gives you two extra checks per year.

4 benefits of biweekly pay over semimonthly pay

Processing payroll on a biweekly schedule is often cheap and easy for businesses. They don’t have to calculate payroll every week, which saves money and time. And there’s less opportunity for clerical error. But this pay period can also preferable over semimonthly pay for employees. Here’s why:

1. Easier budgeting

Planning out your expenses and bill payments is easier when you know exactly when to expect paychecks. With consistent income every other week, you can better predict your cash flow and adjust your spending to keep your budget on track.

2. More paydays

The difference between receiving 24 and 26 paychecks might seem small. But for two months out of every year, you get three paychecks instead of two — just find the months with five Fridays instead of four. Those additional paydays can help you build an emergency cushion or plan for one-off expenses like a relaxing vacation or holiday gifts.

3. Better financial health

It’s easier to plan for bills and recurring expenses when your pay — and the time between checks — is always the same. Paying everything from loans to credit cards on time gives your credit score a positive boost and reduces money-related stress.

4. Easier overtime calculation

If you’re an hourly employee, biweekly pay makes calculating overtime (the extra money you make when working more than 40 hours per week) much easier. Because each pay period has the same number of days, a biweekly pay schedule simplifies tracking extra hours and helps you make sure your overtime pay is correct.

2 potential disadvantages of biweekly pay

Getting paid biweekly has lots of perks, but it’s smart to be aware of the potential downsides:

1. Extra paydays can throw off budgeting

Those two months a year when you get paid three times instead of two are usually a benefit. But it’s easy to let a three-paycheck month throw off your expectations for the following month, leading to overspending.

2. Less frequent than weekly pay or same-day pay

If you rely on frequent cash or are living paycheck to paycheck like over 60% of America, two weeks can be a long time to wait for money you’ve already earned. And when transitioning from weekly pay to biweekly, it can be hard to adjust your spending habits until you settle into the new schedule. Plus, with same-day pay options like EarnIn readily available, waiting two weeks to get paid doesn’t make much sense.

Which payment schedule is better?

Most employers don’t give workers a choice about how often they get paid. But if you’re trying to pick between multiple job offers, considering each company’s pay schedule and how it works for your financial needs and budgeting style can help you make a smart decision.

Here’s a quick breakdown to help you decide:

Biweekly. This pay schedule is great for those who prefer a predictable income flow with a couple of extra paychecks per year.

Semimonthly. This one’s a good option if you like larger paychecks and don't need the twice-yearly income boost from biweekly payments.

Weekly. Weekly pay is ideal if you need frequent access to cash or tend to live paycheck to paycheck.
Monthly. Getting paid once a month is perfect for people with excellent budgeting skills who like getting the largest paycheck possible (and know how to make it last).
Every day. Fortunately, if you have a W2 income, you can choose to get paid any day with Earned Wage Access apps like EarnIn that offer same-day pay.

EarnIn makes biweekly pay a thing of the past

Biweekly pay may be preferable to semimonthly pay, but any pay period is essentially a gap between when you earn your money and when you receive it.

Some employers offer a salary advance so you can borrow against your upcoming paycheck without the high interest rates common with traditional payday loans. But you might not qualify for a cash advance through your employer, and asking plus getting the paperwork in order can be a pain. So skip the headache and access your pay as you earn it with EarnIn.

EarnIn’s Cash Out tool makes it easy to get early access to your pay right from your phone — up to $150/day or up to $750/pay period. Get on-demand access to the money you’ve already earned on a schedule that works for you, with no credit checks, no interest, and no membership fees..

Download EarnIn and make every day payday.

EarnIn is a financial technology company, not a bank. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. EarnIn does not charge hidden fees for use of its services. EarnIn services may not be available in all states. Restrictions and/or third party fees may apply. EarnIn services may not be available in all states. For more info visit earnIn.com/TOS

Individual maxes may vary. Other restrictions may apply. See our Terms of Service for more details

Note that Earnin is not responsible for any bank or third party fees that you may be charged if there are insufficient funds in your account.