Biweekly pay refers to a payroll schedule in which employees are paid every two weeks, resulting in 26 pay periods in a year. This means that employees receive their wages twice a month, typically on a specific day of the week, such as every other Friday.
The key aspects of biweekly pay include:
Frequency: Employees receive paychecks 26 times a year, as opposed to monthly (12 times a year) or weekly (52 times a year).
Calculation of Pay: For salaried employees, the biweekly pay is calculated by dividing the annual salary by 26. For hourly employees, their total hours worked in the two-week period are multiplied by their hourly wage.
Budgeting: Biweekly pay can help employees with budgeting, as they receive their income at regular intervals, which may align well with their expenses.
Overtime and Deductions: In a biweekly pay schedule, overtime hours worked during the two-week period are typically calculated and paid on the next paycheck. Additionally, deductions for taxes, benefits, and other withholdings are taken from each paycheck.
Variability in Pay: Employees may receive varying amounts each paycheck if their hours fluctuate, especially for hourly workers. For salaried employees, the amount remains consistent unless there are adjustments due to bonuses, raises, or other factors.
Overall, biweekly pay is a common payroll practice used by many employers and can have various implications for employees’ financial planning and cash flow management.