Understanding Biweekly Pay Periods: How Many Are There in a

This payment schedule typically results in 26 pay periods within a calendar year. However, due to the varying length of months and the total number of days in a year, some years can have an additional, 27th, pay period. Employers must plan for this additional payroll run, especially concerning budgeting and deductions. For salaried employees, employers may choose to pay the same biweekly amount, effectively giving an additional paycheck and slightly increasing total compensation for that year. Alternatively, some employers might divide the annual salary by 27 instead of 26 for that year, resulting in slightly smaller individual paychecks but maintaining the exact annual salary. It is important to review how benefit deductions, such as health insurance premiums or 401(k) contributions, are handled to avoid over-collecting or exceeding annual limits.

Which Pay Frequency is Right for Your Business

Examples of common pay periods include weekly, bi-weekly, semi-monthly, and monthly. The length of the pay period is determined by the employer and can vary depending on the company’s payroll policies. The pay period is important for both employers and employees as it dictates when employees receive their wages and helps in managing cash flow and budgeting. The table below provides the biweekly and annual premium pay caps for 2012 by locality pay area. These caps become effective as of the first day of the first pay period beginning on or after January 1, 2012. The table below provides the biweekly and annual premium pay caps for 2013 by locality pay area.

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But there is a difference between paying biweekly, or 26 times a year, and semimonthly, or 24 times a year. And that difference comes into play when employees come onto or leave the payroll in the middle of a pay period. Bi-weekly pay periods comprise two-week or 14-day pay cycles (typically 80 work hours).

Leap Years and Pay Periods

Many companies use one payroll cycle, such as weekly, for hourly employees and another payroll schedule, such as biweekly, for salaried employees. Likewise, a company might manage independent contractor payouts monthly while running bimonthly payroll for traditional employees. Your decision might vary depending on the size of your HR team, whether you can find a payroll provider with fair payroll fees, and whether your employees are salaried or hourly workers. Bi-weekly pay means employees receive compensation every two weeks.

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Depending on where your employees work and the type of industry you operate in, your state may provide guidelines for the type of payroll schedule you need to follow. Only exempts and salaried nonexempts feel the full brunt of the 27th/53rd pay period phenomenon, because they’re paid annual salaries. Hourly-paid nonexempts are impacted only to the extent of withholding and deductions. You can prorate the pay of newly hired exempts or the pay of exempts who terminate, but they must still receive all their pay for all their hours worked. MTK, therefore, should make Jimmy whole and pay for those seven hours at the next pay period.

• Two kinds of pay periods for salaried employees are often confused.
• If a pay period ends on June 15, employees may get paid on June 20.
• This would include general increases, locality pay increases, and within-grade increases (based on longevity and acceptable performance).
• Collective bargaining agreements are especially specific about pay periods and wages, so check them carefully.
• That’s why in years with an extra pay period it’s important to inform employees that their annual salary will come out the same despite slightly smaller paychecks for each pay period.
• One common method is to simply pay the extra paycheck, effectively increasing the annual salary for that year.

A reservist may not receive the reservist differential for periods during which he or she uses paid time off, since the reservist is already receiving full civilian pay for such periods. A pay cycle shows how often employees are paid, such as 26 times a year for a biweekly cycle. It helps HR teams plan for payroll holidays and stay compliant with payroll regulations. A consistent cycle also supports smooth payroll processing and salary planning across departments.

This consistent 26-period cycle is widely adopted by many employers, particularly mid-sized to large companies. It provides a balanced approach, offering employees regular access to their earnings while managing administrative costs for payroll processing. The predictability of 26 paychecks helps both employees and employers with financial forecasting and budgeting. Learn why you typically get 26 paychecks, but some years bring an unexpected 27th.

Most businesses using this method pay either on the 1st and 15th of each month or the 15th and last day of each month. They may sound similar, but biweekly payments occur every two weeks, yet semi-monthly paychecks are distributed on set dates within the month, for example, the first and fifteenth. 24 paychecksNumber of paychecks per year Employees who are paid semimonthly always receive two paychecks per month. Companies that run payroll with a biweekly frequency dole out a total of 26 paychecks per year.

• However, some businesses occasionally pay daily or on demand in certain circumstances.
• Employees receive 12 paychecks under a monthly schedule and 24 paychecks under a semimonthly schedule.
• For instance, if deductions are calculated as a fixed amount per pay period, they might be collected 27 times instead of 26.
• Hourly-paid nonexempts are impacted only to the extent of withholding and deductions.

In HR, that’s never a good reason to continue on with difficult measures. As an example, the leap year in 2020 could potentially produce an additional payroll period if you receive a biweekly paycheck. Because of the scientific 365-day system and biweekly pay cycles, once in a while, there are 27 instead of 26 periods of payment within one year.

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These caps become effective as of the first day of the first pay period beginning on or after January 1, 2008. The table below provides the biweekly premium pay caps for 2009 by locality pay area. These caps become effective as of the first day of the first pay period beginning on or after January 1, 2009. The table below provides the biweekly premium pay caps for 2010 by locality pay area. These caps become effective as of the first day of the first pay period beginning on or after January 1, 2010. The table below provides the biweekly premium pay caps for 2011 by locality pay area.

When using a semi-monthly payroll system, you will always have only 24 pay periods per year. The upside to this form of payroll is that benefit deduction, and accounting are easier to manage. Biweekly payroll is also popular among salaried and hourly employees, with 26 paychecks issued annually – though some years may how many bi weekly pay periods in 2020 have 27 due to the calendar.