If you’re looking for a job, chances are you are hoping to get paid. Or at the very least, you’d like to know what sort of payroll schedule your company-to-be works with. As it turns out, not every company pays their employees in the same way. But knowing when you can expect to be paid can alleviate a lot of worry about finances, as you can better budget your paychecks each month.
There are a number of different types of payroll schedules and ways of understanding when you will be paid. Some of the most common payroll schedules for employees include weekly, bi-weekly, semi monthly, and monthly.
It can get a bit confusing with all the bi’s and semi’s, especially since bi-weekly and semi monthly turn out to be quite similar, though there are a few differences in terms of how many checks you might receive. Payroll schedules aren’t determined at random. In fact, there are very specific reasons why a company’s accounting department might choose one over another.
Our CareerBliss experts are diving into the nitty gritty of semi monthly payroll, bi monthly payroll, monthly payroll and weekly payroll to uncover the pros and cons of each to you, as well as how many paychecks you can expect to receive every year under each of the most common payroll methods. We’ll also take a quick look at the differences between how employees are paid vs contractors, as well as why accounting departments might choose a specific payroll schedule to begin with. As you can see, there’s a lot to cover in the wonderful world of payroll schedules, so let’s dive right in!
Here are some of the reasons why accounting departments choose specific payroll schedules:
Weekly payroll schedules are generally used for hour workers, but it’s not the preferred method of most accounting teams. Having to process checks every week can become costly, so to save time and money, some accounting teams opt for a different payroll method.
Bi-weekly payroll schedules are similar to semi-monthly, in that you receive a paycheck every other week. However, depending on the month, you might get paid 3 times in a month, as a pose to getting paid on only the fifteenth and thirtieth. Because it’s not as consistent in terms of paycheck processing, this causes a lot more work for accounting departments, since for two months out of the year they’ll be cutting 3 paychecks per employee instead of 2. Still, accounting to CPA Advisor, “Biweekly payroll is the most popular payment option. According to the Bureau of Labor Statistics, 36.5% of employees are paid biweekly. On the other hand, only 19.8% of employees are paid using the semimonthly payroll frequency.”
Semi monthly payroll schedules mean you can expect to be paid twice a month, generally on the first and the fifteenth (or in some cases the fifteenth and the thirty-first (or thirtieth). There can also be some other variations. Payment tends to be pretty consistent for the most part, with 87 hours in a pay period. However it can get confusing when processing payroll for hourly and salaried employees, which is why oftentimes companies might pay salaried employees semi monthly, while they put hourly employees on a weekly pay schedule. Another reason why this could be confusing is that payroll is run on different days each week. So one day the 15th might fall on a monday, another month it’s a wednesday. Since the payroll day of the week is always shifting (despite the date being the same, it becomes easy to lose track of time. It can also become a bit confusing when holidays land on payroll dates.
Monthly payroll schedules are cost-saving options for accounting teams who don’t want to be processing paychecks throughout the month, but are not often the preferred option because employees don’t tend to favor this payroll method. In this payroll schedule, you receive a single paycheck at the end of the month.
Now, while that’s a bit of interesting insight into what goes into accounting departments choosing sem monthly, bi-weekly, monthly or weekly payroll schedules, we know that’s not really what you came for (but now you know!). See, we know that what you really want to know is what a certain type of payment schedule might mean for you and your bottom line--bringing in a paycheck (and how often you can expect to do so under each of these payroll schedules.
What each payroll schedule means for you
- Weekly payroll schedules mean you’ll be getting a check every week, usually receiving one on Fridays. Employees tend to love this schedule, and understandably so. This method works best when paying hourly workers or employees who work irregular hours (such as contractors).
That means that if you work in industries such as mining, manufacturing, construction, etc, you will probably be getting a weekly paycheck. This is because it’s not uncommon in those industries to work odd or irregular hours, and cutting checks weekly helps companies keep better track of their cash flow and needs for finishing projects in a timely way.
- Bi-weekly payroll schedules might seem a favorable option for employees since you might receive up to 3 paychecks a month depending on the month. That comes out to 26 paychecks a year. One drawback is you can’t always depend on the amount that you’ll be receiving, especially if you work overtime.
Bi-weekly and Semi monthly tend to be the most used payroll methods in the industry, not only because of their consistency and regularity, but they provide a happy medium cost-wise and work-wise, to weekly or monthly payroll cycles.
- Semi monthly payroll schedule: You’ll receive 24 paychecks every year. If you’re a salaried employee (no overtime), this is a good payroll system, since you can depend on the consistency of each paycheck. You’ll know that every two weeks, on two specific days of the month, you’ll receive X dollars. And that regularity can provide peace of mind as you go about your month. Those are some of the key benefits of semi monthly payroll.
- Monthly payroll schedules are likely the most disliked payroll schedules for employees. One check a month means a big payout at the end of the month, but it means really having to budget your finances the entire month. It also means that when you start a new job, depending on when you begin, it could take a month or more before you ever see a first paycheck, and that can be disconcerting. However, some industries such as financial services and other high-wage companies use the monthly payroll schedule, which is typically okay if you’re earning high dollars and aren’t just watching on your next paycheck to arrive. Just remember that monthly payroll arrangements require some mad money management skills, even if you are earning top dollar.
Is a semi monthly or bi-weekly paycheck the best payroll schedule?
While bi-weekly and semi monthly are similar, bi-weekly payroll schedules still outrank semi monthly as the most popular and favorable method for payroll. Since a bi-weekly pay schedule benefits employees and accounting teams, it is often a favored method. Not only does it help save accounting from high costs of frequent payroll processing, but it gives you the regularity you likely want to see when it comes to your finances. Like semi-monthly payroll, it provides a degree of consistency.
Payroll schedules for Employees vs payment schedules for Contractors
While employees can expect to be on a payroll schedule such as semi monthly, bi-weekly, monthly or weekly, contractors often work under different terminology and payment schedules. However, it’s also not uncommon for contractors to work on a weekly pay schedule. But in some industries, payment is scheduled in terms of Net days--that is, the number of days from the date of your invoice.
In the contract work world, especially in agency work, you can expect to have payrolls schedules such as Net 30, Net 45, Net 90, etc. This simply means that the company or agency operates one a payment schedule that distributes checks, etc, to contractors within a specified number of days after the date of the invoice. Net 30 means you can expect payment in full within 30 days of your invoice date.
Well there you have it. Now you know nearly everything there is to know about payroll schedules, the pros and cons of each, and what are the best and most popular payroll methods for both accounting teams and employees. Now it’s time to put your knowledge to work and find the happy job with the payroll schedule that works for you.
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The CareerBliss Team
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