Is there a benefit for employers to pay every two weeks for hourly help?

[SLJ6974]

Does an employer gain some sort of advantage for paying their hourly employees every two weeks. Me and my husband are both paid by the hour, me every week and himself every two weeks. I have noticed that next year there will be four months in which I will receive an extra paycheck, but he will only receive an extra paycheck during two months. It just had me thinking.

 

[*pixie*dust*]

It probably depends largely on WHO is doing payroll. If it is outsourced it is cheaper to pay for service every two weeks instead of every week. In the case of a large company, even if it is in house there is still a significant amount of work to get everyone paid so doing it every other week is often cheaper for them as well.

 

[It'sWDW4me]

It's cheaper for an employer to pay someone (if they have an outside payroll service provider) to have payroll every other week vs every week. It's even cheaper to have 2 payroll periods a month (like where I work now - payroll on the 15th and on the last day of the month). Cheaper YET to have only one paycheck a month. I worked at a place for 7 1/2 years where we got paid on the last day of the month. Let's just say it was challenging getting my budget straightened out when I first started there but, after a while, it didn't even phase me.

Because there is 52 weeks in a year, people getting paid weekly will ALWAYS have 4 months in which there is an "extra" paycheck and people getting paid every-other week will ALWAYS have 2 months with an "extra" paycheck.

 

[Pakey]

There are 52 weeks in a year so anyone paid bi-weekly will receive 26 pay checks as opposed to weekly that is 52 paychecks. If you divide those 26 pay periods into months, you would then get 2 months where 3 paydays will fall within a calendar month. However, in the end, you get paid the same number of days worked.

The benefit to the employer is the amount of time it takes to prepare payroll. Doing weekly means twice the amount of time, twice the number of tax payments, 401k payments, etc. We have over 500 employees so it is so much easier to do bi-weekly.

 

[bjscheel]

Also, companies with payroll of a certain size have to deposit their federal payroll taxes within a couple of days of the payday. Doing that less often is another time saver.

 

[brymolmom]

Think of it this way (I realize an 'old school' example as most do online banking now...but easier to illustrate):

If your creditors would let you pay your bills every other month....How much time/energy would that save you?

Getting the checkbook out...writing the check....addressing the envelope....stamping it...bringing it to the mailbox....THAT is where the real time and effort is going. Now if you write that check for $100 instead of the usual monthly $50 that really doesn't impact the amount of time you are spending on that transaction.

To a business, time is money - and by doing this whole process less frequently, they are saving money. And even though computers are usually doing it - there are people behind the computer process, so still less 'money' spent by the company. Also, if you are receiving an actual paper check - DEFINITELY the company prefers to give fewer of those out annually - it costs money for the ink, the paper, for reprinting the checks that get jammed, etc.

 

[swilshire]

It's even cheaper to have 2 payroll periods a month (like where I work now - payroll on the 15th and on the last day of the month).

That was the worst ever for me. Getting paid (poorly, I might add) on the 1st and 15th was awful. I didn't have all that many bills at the time, but it was a LONG time between some of those paychecks.

Sheila

 

[arthur06]

Both DW and I are paid bi-weekly on Fridays. It works out nice for us, as we are paid on alternate Fridays. So, every week we have a 2 week paycheck go into our account.

DW works for the USPS and her pay stubs are mailed to her (she has direct deposit) so 1 stamp every two weeks is also cheaper then a weekly mailed pay stub.

 

[ancestry]

That was the worst ever for me. Getting paid (poorly, I might add) on the 1st and 15th was awful. I didn't have all that many bills at the time, but it was a LONG time between some of those paychecks.

Sheila

I get paid monthly from my one job at a University and sometimes if I do a special project and they don't get it in to payroll by the monthly deadline I end up waiting almost 2 months to get paid for it. I'm hoping I get paid this Friday for work I turned in in October!

Twice a month isn't bad! Trust me. The key to surviving is not living paycheck to paycheck. You have to bank some reserves.

 

[Acklander]

While you'll have 4 extra checks during the year and he'll have to extra checks, but his are for 2 weeks worth of wages, and yours are only for one so it all equals out the same. Not only is it less work to do it every 2 weeks there's less overhead in that they only have to buy half as many checks.

 

[Sagginit]

also there is interest being collected on that cash. so if they hold onto the pay from the first week and roll it into the next payperiod, they get an extra week of interest on it. overall it saves them money. i like biweekly, it lets me budget easily. half the bills/savings one check, the rest in the other. i already looked into my extra pay check weeks next year. i believe its march and june, perfect b/c i have a wedding to attend in each month and need some extra $ for a gift and any travel expenses.

 

[bumbershoot]

Cheaper YET to have only one paycheck a month. I worked at a place for 7 1/2 years where we got paid on the last day of the month. Let's just say it was challenging getting my budget straightened out when I first started there but, after a while, it didn't even phase me.

Yes! We were SO scared going into once-a-month, and the only way we made it through that first month was b/c of the bonus DH got up front, but it's been the absolute best. If I felt like it, I could get everything all set to be paid in the first week of the month, then just sit there, doing nothing the rest of the month. Absolutely wonderful.

When we were paid twice a month, even though we KNEW that there was no "extra" check, it was all just how much DH made, we would spend it to nothing and then we were just in the same boat. Going to once a month has helped us make a huge turnaround in our finances.

 

[Familyof4lovesDW]

Yes! We were SO scared going into once-a-month, and the only way we made it through that first month was b/c of the bonus DH got up front, but it's been the absolute best. If I felt like it, I could get everything all set to be paid in the first week of the month, then just sit there, doing nothing the rest of the month. Absolutely wonderful.

When we were paid twice a month, even though we KNEW that there was no "extra" check, it was all just how much DH made, we would spend it to nothing and then we were just in the same boat. Going to once a month has helped us make a huge turnaround in our finances.

I worked for a small company several years ago and only got paid once a month. I started with a temp agency that paid every week, so I went from getting paid every week to once a month, which was a huge adjustment. It was never the same day either. It was the third Friday of the month, so it could be before or after the bills were due. I had never heard of getting paid once a month for a full time job before that.

 

[m&m's mom]

When I first got out of college I was paid monthly. I loved it cause I could pay all my bills, everything left was mine to spend.
For the past 20 years I have been bi-weekly (every 2 weeks) and it is nice too since I split my bills.

 

[sasywtch]

I work for the State of CA where they passed a law that employers had to pay more than once a month yet state employees (most of us) are still paid monthly It's been talk for 20 years that I can remember that they pay once a month and after a certain time for the interest they accrue. With all the state employees, I'm sure it's a hunk of change. We also aren't suppose to cash our check until after 3 which is the time the bank they have starts a new interest day.

I honestly wouldn't know how to live with weekly or biweekly paychecks anymore as it's all the same amount of money. I like paying all bills the first of the month and what's left, that's it.

 

[Mommee]

Does an employer gain some sort of advantage for paying their hourly employees every two weeks. Me and my husband are both paid by the hour, me every week and himself every two weeks. I have noticed that next year there will be four months in which I will receive an extra paycheck, but he will only receive an extra paycheck during two months. It just had me thinking.

he may get half as many extra paychecks but they will cover twice as long as yours do.

 

[crisi]

Yes! We were SO scared going into once-a-month, and the only way we made it through that first month was b/c of the bonus DH got up front, but it's been the absolute best. If I felt like it, I could get everything all set to be paid in the first week of the month, then just sit there, doing nothing the rest of the month. Absolutely wonderful.

When we were paid twice a month, even though we KNEW that there was no "extra" check, it was all just how much DH made, we would spend it to nothing and then we were just in the same boat. Going to once a month has helped us make a huge turnaround in our finances.

I grew up in a house where my Dad was paid quarterly. Its probably one of the reasons I'm such a bear about savings and financial security. It was almost literally feast or famine - my parents never got good at it. When he first got paid we had money - and before the next paycheck came my mother would be trying to stretch $20 for a week. My Dad was good at making sure there was enough money to pay the mortgage, but never figured out how to stretch it to cover that last week of groceries.

 

[threeboysmom]

I get paid bi-monthly, but guess I'm getting the short end of the stick. I get paid on the 1st and 16th of every month.

As far as I know, there are only 12 "1st's" and 12 "16th's" in each year so no "extra" checks for me, lol.

OP is lucky to get six extra paychecks between her and DH!

 

[DawnM]

This.

I was paid 13 times per year, once every 4 weeks. It was just the way they set it up.

DH is paid on the 15th and the 1st of each month.

However, we have always been salaried employees.

Dawn

There are 52 weeks in a year so anyone paid bi-weekly will receive 26 pay checks as opposed to weekly that is 52 paychecks. If you divide those 26 pay periods into months, you would then get 2 months where 3 paydays will fall within a calendar month. However, in the end, you get paid the same number of days worked.

The benefit to the employer is the amount of time it takes to prepare payroll. Doing weekly means twice the amount of time, twice the number of tax payments, 401k payments, etc. We have over 500 employees so it is so much easier to do bi-weekly.