Payday doesn’t come around without some excitement, but how often these days occur will depend on your employer and/or industry. While many have their wages paid weekly, there is still a large majority of workers that fall into a bi-monthly pay schedule. If you have ever wondered why this is the case, let’s review why companies select this payment option for their employees and what are some of the benefits and considerations.
Advantages of bi-monthly pay
This biweekly time frame comes with many advantages, not the least of which is giving your payroll team the time to conduct a measured payroll cycle that is not rushed. When compared to weekly pay cycles, bi-monthly will effectively half the time with the same outcomes of time being paid. This will save you money and potentially resources, as you are not having to reconcile an issue payments 4 times a month. This will also relieve your management from signing off and approving pays too frequently and eating into their productive hours. Additionally, your paperwork and data will be half of what it could be, minimising waste and unnecessary administration.
If you have been paid monthly before, you won’t need to be sold on the benefits of bi-monthly pay. If you’re partial to weekly pay, then that extra week might feel quite long. This pay frequency also affords your employees greater control of their finances, with a greater sum deposited into their account and responsibility to distribute that within a two week period. If you have never taken the time to explain the payment process and the relevant procedures, take the time to educate your team on this.
There is more to a bi-monthly pay than you think, with companies differing on what timeframe the pay cycle includes and when that date is paid. Understandably, payroll is never calculated by projecting forward, and will only include days where work has been conducted. What does this mean? Well, if your payday is on Wednesday, that doesn’t mean that your pay cycle is from Wednesday to Tuesday. It might well be Monday to Sunday, and so you should make that fact known you your employees so that can predict the correct pay at the correct time that accounts for annual leave, unpaid leave and any concessions made within that pay period. If any changes are to be made to the days of these pay periods, you must communicate this with your employees ahead of the change as your employees may have payments scheduled based on their payday.
If committing to a regular pay cycle is something that you are struggling to adhere to in your business, exploring an outsourced payroll partner might be the route to take. Similarly, if you find your current payroll solution to not be efficient, discuss alternatives with our i3 Group consultants who are experienced in facilitating a streamlined payroll every fortnight.
Expect a tighter, more thorough payroll with i3 Group, and let’s engineer a plan that works within your business goals and budget. Contact us today for a free trial.