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benefits of Bi-weekly vs Bi-Monthly Payroll
Benefits & Compensation
benefits of Bi-weekly vs Bi-Monthly Payroll
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
I work for a start up that has deep pockets for the most part. Our pr is presently set to Bi- Mo and I really would like to switch to Bi-Wkly. The reason? It drives me nuts to coordinate the operation
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Forums » Topic Forums » Benefits & Compensation » benefits of Bi-weekly vs Bi-Monthly Payroll
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benefits of Bi-weekly vs Bi-Monthly Payroll
posted at 3/19/2010 8:47 AM EDT
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Posts: 2
First: 3/19/2010 Last: 3/23/2010 |
I work for a start up that has deep pockets for the most part. Our pr is presently set to Bi- Mo and I really would like to switch to Bi-Wkly. The reason? It drives me nuts to coordinate the operation of preparing payroll etc, as in okay, it is the 16th so we can now run pr etc. Everyone is highly compensated.
What would be the benefits so I could share with the owners? thanks! Madi |
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benefits of Bi-weekly vs Bi-Monthly Payroll
posted at 3/19/2010 9:24 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
#1: it is very rare that everyone in any business is exempt (which is what I suspect you mean by saying highly compensated)....I would do a review to make sure that any administrative people are truly exempt. Even if you pay a non-exempt employee a salary, if they work any overtime, you still owe them OT wages on top of the 40 hour per week salary.
#2: You mean that you currently pay semi-monthly (or twice a month), right? Not bi-monthly which means every other month #3:I personally like biweekly becuase the processing schedule is standard to days of the week -- that is payroll is always run on either Monday or Tuesday, so all divisions know they have to have info to me at the same time of the same day...with semi monthly it is all over the calendar because the days move. It also helps when you have employees who could possibly work overtime because your pay period = 2 workweeks. #4: However most people like to get paid on the 1st and 15th or twice a month. And will balk at changing, because paychecks are now 1/26th of salary rather than 1/24th....not alot but enough to cause some waves. #5: The negative from an accounting/financial/business standpoint is that there will always be two months that have 3 payrolls when you pay bi-weekly...which messes up a monthly budget. The finance group here has to decide either to have a different budget for those two months or to annualize a bi-weekly payroll and divide by 12. So it never matches up exactly. |
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benefits of Bi-weekly vs Bi-Monthly Payroll
posted at 3/22/2010 8:58 AM EDT
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Posts: 217
First: 3/22/2005 Last: 8/29/2011 |
While I agree that many exempt employees don't care and may even prefer semi-monthly pay, you need to also consider what your company will look like when it grows. Too often it's expedient to design for today and all of a sudden you're a 10k employee company and you have real challenges with your systems and processes. It's also much easier to have one payroll cycle than 2 but it has been done and is far easier to manage with hourly, non-exempt employees on a bi-weekly basis if you want to leave the salaried exempt as semi-monthly. |
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benefits of Bi-weekly vs Bi-Monthly Payroll
posted at 3/23/2010 5:59 AM EDT
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Posts: 2
First: 3/19/2010 Last: 3/23/2010 |
Thanks for the feedback. Yes, it is a startup of sales and engineers. we only have one admin person at this time. The finance person who set this up, did so because he has a double engineering degree and is one of the founding partners. while i am implying that it may be easier to switch to bi-weekly vs semi monthly, for my responsibilities, note, that it is also fair to assess how will this play out in the future which one of you posted. I see having the dual system even more of a nightmare which is why i would rather set it up today...in a manner that will support growth. I kind of like that "bi-Mo" idea that i posted in error. lol thanks for pointed it out. |
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benefits of Bi-weekly vs Bi-Monthly Payroll
posted at 3/23/2010 8:54 AM EDT
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
The only catch to the biweekly payroll is that you get 26 paydays a year instead of 24. This means that each check will be slightly smaller. I found that this is a really big deal to some employees living from paycheck to paycheck when we got ready to make the switch. |
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