Biweekly Salary and 27 Payrolls in a Year ASAP Help Center

Biweekly pay period also means that an employee receives about two paychecks per month. In many cases this means that an employee’s boss will simply divide the employee’s monthly salary by two and have the employee receive half of their monthly pay on each paycheck. Employees who are paid semi-monthly receive 24 paychecks per year. When setting up payroll, two payment dates must be specified (usually the 1st and 15th of every month).

Current Issue January 2025

In years with 27 or 53, these deductions will have to be recalculated or blocked in the additional pay period. If your organization holds back, say, one pay period, then the first pay period of the year would be paid to employees on January 31, 2010, which means your payroll is one pay period in arrears. That gives the payroll department January 13-through-January 30 to process payroll for distribution on Friday, January 31, 2020.

Monthly Pay Periods

• Many states do not allow a monthly pay schedule for nonexempt workers.
• Join thousands of businesses and households who trust SurePayroll for their payroll and HR needs.
• It regulates and determines how often the employees will get paid.
• This way, employees know exactly when the company deposits their earnings in bank accounts.
• On this schedule, employees are paid on the same dates each month, such as the 1st and 15th of the month.
• Psychologically, biweekly pay can encourage employees to change their behavior for the better.
• So if your salaried employees are paid weekly or biweekly on a Wednesday or Thursday, they might get an extra paycheck.

Biweekly (36.5 per cent) is the most common pay period length by private businesses. A pay period is the time frame in which work is being done and paid for. For budgeting purposes, remember this would include any time your team is on the clock, including any onboarding or training time. The decision how much and when to pay employees is always tricky. Before you decide how to handle a 27-pay-period year, talk to a payroll tax expert and an employment law expert. Many employers choose to work with a payroll service provider to help automate paying their employees.

Why Are Biweekly Pay Periods Popular?

Either way, keep a close eye on payroll taxes, wage garnishments and employee benefit deductions. Whether your company will have an extra pay date depends on when you issued your first employee paychecks this year. If you use a weekly or bi-weekly payroll frequency and issued the first paychecks of 2020 on January 2, a 53rd or 27th payday will occur on Thursday, December 31.

• Salary is usually paid on a biweekly or monthly basis for professional employment.
• The table below provides the biweekly premium pay caps for 2005 by locality pay area.
• One common measure is to pay employees for 86.67 work hours per semimonthly period (not including overtime), regardless of the number of days in the semimonthly period.
• Similarly, the Executive Schedule level V annual rate of $183,100 divided by 2,087 hours yields an hourly rate of $87.73 and a biweekly rate of $7,018.40 ($87.73 x 80 hours).
• Payroll TaxesThe amount of pay will affect the total Social Security and Medicare you and your employees pay.
• In cases of emergency, this means that they can move more quickly to resolve their financial issues.
• Here are some pros and cons of different pay period frequencies to help you decide how to pay employees.

Financial Planning for Biweekly Pay Periods

Many states do not allow a monthly pay schedule for nonexempt workers. Employees also may find it tougher to manage their personal finances on a monthly pay schedule. Monthly pay frequency is the least common pay period according to the BLS report.

It’s based on the schedule that payroll departments follow for paying out employee compensation. Employee BenefitsPaying additional salary may also result in paying additional benefits. For example, you might be over-funding someone’s 401(k) with the extra pay period, beyond the maximum allowable amount. If that happens, you would have to give back the money to the employee. Since most health/dental/vision premiums are invoiced on a monthly basis, we suggest employers consider deducting employee portions of health premiums twice a month only regardless of 26/27 payrolls.

This makes for 26 paychecks yearly and 27 paychecks in a leap year. Since it is more frequent (as opposed to monthly or semimonthly pay), employees can better manage finances and regulate their expenses. It also builds to employee happiness and is, therefore, the most common payment system of choice by private businesses in the U.S. The biweekly pay amount for a salaried employee is an amount proportional to the annual salary.

These caps are how many bi weekly pay periods in 2020 effective as of the first day of the first pay period beginning on or after January 1, 2025 (January 12, 2025, based on the standard biweekly payroll cycle). Section 5538 became effective on the first day of the first pay period beginning on or after March 11, 2009 (i.e., March 15, 2009, for executive branch employees on the standard biweekly payroll cycle). For the convenience of timekeepers, each biweekly pay period appears as two separate weeks, with the beginning and ending dates indicated for each week. In a monthly payroll cycle, employees are paid once a month, on a specific day of the month. This cycle is often used for salaried employees around the globe and can be less administratively burdensome for employers.

Tools to Simplify Payroll Management

Because of that, each of those months has three bi-weekly pay periods. Specifically, a bi-weekly payroll schedule has 26 pay periods per year. So the first two weeks of January would be pay period one, and the second two weeks of January would be period two, and so forth. That is more than twice the number of checks to cash than on a monthly pay schedule. On the other hand, pay dates for semimonthly pay periods are fixed—there are two per month, every month.

The employee will see that their biweekly pay has been calculated as a normal paycheck. However, since their paycheck is actually half of their monthly salary, the employee will simply receive this total 26 times over the course of the year. No federal or state agency requires you to adjust employees’ pay for the extra pay period. Although most companies choose this option, it may be a costly decision, since employees will receive an extra paycheck, along with extra taxes withheld and extra benefits provided. Employees who are paid bi-weekly receive 26 paychecks per year. Every 11 or 12 years, an additional week is added to the pay period resulting in a 27th paycheck due to the extra day in a Leap Year.

Choosing the right payroll cycle for your business is crucial for accurate, consistent, and compliant payroll processing. Each payroll cycle has its own set of pros and cons, and the choice ultimately depends on the specific needs and preferences of your business and your employees. It’s predictable and consistent, as employees know exactly when they will be paid. However, it can be more challenging to manage when months have a different number of days, which can affect the calculation of hourly wages. This article explores the different types of payroll cycles and offers best practices for efficient and accurate payroll processing.