Most businesses—70%—pay employees weekly or biweekly. But between weekly payroll and biweekly payroll, which is best for your business?
Both pay frequencies have their advantages for employers and employees. Read on to learn how to choose between weekly and biweekly payroll.
| Did You Know? |
|---|
| Depending on your state, you may not have a choice. Some states require weekly payroll. |
Skip Ahead
- Weekly payroll vs. biweekly payroll
- How to choose between weekly payroll and biweekly
- How to keep weekly or biweekly payroll organized
- Weekly vs. biweekly payroll: Who’s the winner?
Weekly payroll vs. biweekly payroll
Twenty-seven percent of companies pay employees weekly, while 43% pay their teams biweekly.
Here’s the difference between the two popular pay periods:
- Weekly Payroll: Employees receive paychecks once every week for a total of 52 pay periods (and paychecks) per year.
- Biweekly Payroll: Employees receive paychecks once every other week for a total of 26 pay periods (and paychecks) per year.
Because it’s more frequent than biweekly payroll, running weekly payroll requires more administrative work, which you may not like. It also means more frequent paychecks, which your team may like.
| Weekly Payroll | Biweekly Payroll | |
|---|---|---|
| How Often Do You Need to Run Payroll? | Once every week | Once every other week |
| Number of Paychecks Per Year | 52 | 26 |
| How Many Businesses Use This Frequency? | 27% | 43% |
How to choose between weekly payroll and biweekly
If you’re like most business owners, deciding how often to pay your team might come down to weekly and biweekly payroll.
The right choice for your business depends on several factors, including:
- State laws
- Your team
- Administration
- Cash flow
1. State laws
The first thing you need to consider is which pay frequencies your state allows. Pay frequency requirements by state determine whether you can use weekly or biweekly payroll.
All states aside from Alabama and Florida have laws that require employers to pay employees at least a certain frequency. Although most states typically allow for either weekly or biweekly payroll, there are some exceptions.
Connecticut, for example, requires weekly payroll unless the employer gets approval from the labor commissioner.
New York requires weekly payroll for all manual workers.
Rhode Island also requires that employers pay employees every week, but there are exceptions.
2. Your team
Nearly half of Americans say they live paycheck to paycheck. With a weekly schedule, employees have less time to wait between paychecks.
Regardless of whether they’re paid weekly or biweekly, the employee earns the same amount each year. But, many employees—particularly those paid hourly—still prefer weekly paychecks for better cash flow management and budgeting.
Choosing between weekly payroll and biweekly might also depend on your industry. For example, weekly payroll is more popular than biweekly (65.4% vs. 22.3%) in construction businesses. However, biweekly is more popular than weekly (63.6% vs. 9.9%) in education and health services.
3. Administration
Before you can pay employees each pay period, you need to run payroll. The more frequently you pay employees (i.e., weekly), the more administrative work you have to do.
When you run payroll, you have to calculate the employee’s wages, subtract taxes and other deductions (e.g., health insurance premiums), and distribute payment.
You can use payroll software to streamline the payroll process and reduce your administrative tasks. Many businesses can run payroll in minutes using software, giving you more flexibility to choose between weekly and biweekly payroll without a heavy administrative burden.
However, some payroll providers charge a per payroll fee, meaning you’d pay more—sometimes significantly more—if you run payroll weekly. Look for a provider that allows unlimited payroll runs, like Patriot Software, so you can run payroll as many times you need for the same low monthly fee. If you don’t go with a provider that offers unlimited payrolls, you may want to opt for biweekly payroll to reduce your bill.
4. Cash flow
Both weekly and biweekly pay periods are consistent, meaning you pay employees on the same day each pay period (e.g., Friday). However, weekly and biweekly payroll can impact your monthly cash flow.
Under a weekly pay schedule, you pay employees every week. Typically, this works out to four paychecks per month. But there are a few months in the year that are “five-paycheck months.”
Similarly, under a biweekly pay schedule, you pay employees every other week. Typically, this works out to two paychecks per month. But there are two months each year that are “three-paycheck months.”
During a weekly payroll’s five-paycheck month, your team receives a fifth paycheck. And during a biweekly payroll’s three-paycheck month, your team receives a third paycheck.
Business owners who are unprepared may have trouble managing cash flow during this time. This is especially true with biweekly payrolls, where the paycheck amounts are larger than weekly payrolls.
How to keep weekly or biweekly payroll organized
No matter which popular pay period you use, you need to keep weekly or biweekly payrolls organized.
Here are a few ways to keep payroll organized:
- Use payroll software
- Create a payroll calendar
- Keep records for at least three years
1. Use payroll software
Payroll software can turn an hours-long process into a minute-long task. Not to mention, online payroll automatically updates federal, state, and local income tax rates for accurate calculations.
Look for a payroll system that accommodates the pay frequencies you need. Patriot Payroll® supports all standard pay frequencies (weekly, biweekly, semimonthly, and monthly), as well as less common schedules (quarterly, semi-annually, and annually). Plus, you can run payroll as often as you need at no extra cost.
Also consider using time and attendance software that integrates with your payroll so your employees can log work hours, making payroll a breeze.
2. Create a payroll calendar
A payroll calendar can help you stay on top of the days you need to process payroll, as well as the days employees receive their paychecks.
Your payroll calendar should include information like the:
- Pay days
- Pay period start dates
- Pay period end dates
- Holidays
- Timecard approval deadline
Bonus: Distribute your payroll calendar at the beginning of the year to employees so they know when they need to turn in time cards and get paid!
3. Keep records for at least 3 years
The Fair Labor Standards Act (FLSA) requires that you keep payroll records for at least three years.
You also need to keep time cards, work and time schedules, and other records that you base wage calculations on for two years.
No matter whether you use weekly payroll or biweekly payroll, keep your payroll records in a secure place.
Weekly vs. biweekly payroll: Who’s the winner?
Sorry to disappoint, but there is no winner or loser when it comes to choosing between weekly and biweekly payroll.
Both pay frequencies are popular for a reason—they’re typically consistent, compliant with most state laws, and a fan-favorite among workers.
Choose weekly payroll if your state requires it or if your team greatly values more frequent paychecks.
Choose biweekly payroll if you want to choose the most popular pay frequency and cut down your administrative burden.
If you don’t like what you choose, you can typically change payroll frequency as long as you stay compliant and give advance notice to your team.
Whether you choose weekly, biweekly, or another pay frequency, Patriot’s got you covered. Our payroll supports all pay frequencies and offers unlimited payrolls. And when you sign up for our payroll services, we’ll handle federal, state, and local payroll tax filings and deposits. Get your free trial today!
This is not intended as legal advice; for more information, please click here.
