Just as the word in itself suggests, Bi-weekly and Bi-monthly are two forms of payroll systems. This system of payroll is used in different organizations to provide the salary to their employees on a different time trend.
This involves the payment process in which an organization pays their employee who is supposed to receive their payment.
Key Takeaways
- Bi-weekly refers to an event that occurs every two weeks, while bi-monthly means every two months.
- Bi-weekly results in 26 occurrences per year, whereas bi-monthly results in only 6 occurrences.
- Bi-weekly payments, such as for a loan, can lead to faster debt repayment and lower interest costs than bi-monthly payments.
Bi-Weekly vs Bi-Monthly
In the simplest words, Biweekly means once every two weeks, whereas Bimonthly means once every two months. Biweekly can be “twice a week” or “every other week.”. On the other hand, Bimonthly means “every other week” if it’s twice a month, or it can also mean “every other month.”
Bi-weekly involves salary distribution every two weeks or twenty-four days to the employee by the company. It is commonly preferred by most people as it is not complicated.
It is very easy to calculate the paydays and work hours in terms of bi-weekly. But it isn’t preferred by those who prefer monthly pay as it gets complicated to plan the month’s budget.
Bi-monthly is a semi-monthly based payroll system. It sometimes also refers to a once every two months payout to the employee.
It is preferred by employees as the monthly budgeting gets simplified for them. In contrast, the employer does not prefer this as it gets tough to determine the pay dates and work dates.
Comparison Table
| Parameters of Comparison | Bi-Weekly | Bi-Monthly |
|---|---|---|
| Payroll recurrence | Bi-weekly refers to the payroll frequency every 14 days. | Bi-monthly refers to paying twice a month. |
| Processing time | The processing is finite and it is simple. | It is a bit complicated to calculate the paydays. |
| Time period | The time period involves 26 pay dates or 27 pay dates. | It involves 24 pay dates. |
| Processing hours | It is simple. | It is complicated. |
| Pay periods | Bi-weekly involves around 27 days. | Bi-monthly involves finite 24 days. |
What is Bi-Weekly?
The bi-weekly system involves twenty-six paychecks per year. In a system of bi-weekly payment distribution in an organization, the payment is low when compared to that of the payments received bi-monthly.
The bi-weekly payment structure is very finite and consistent when compared to that of the semimonthly payment system.
There are quite a few merits to this system. This system is predictable for employees, and it is quite easy to stick to for both the employer and the employee.
But again, on the other side, there are a few constraints that are indeed alarming and require looking after. Those constraints include the occasional improper coincidence with respect to calendar months.
At times it is indeed confusing as a few months require three payroll runs in the organization in order to pay the employees.
This type of payment system creates challenges with monthly budgets. The time period occurs every two weeks or 14 days.
It is twenty-six times a year. The time period determination is calculated as eighty hours per day for the employee.
The employer prefers this type of payment system as it is easier to determine dates of payment to the employee, but it is indeed difficult for the employees who have followed monthly budgeting patterns.
What is Bi-Monthly?
A bi-monthly system involves around twenty-four paychecks a year. The payment is higher to the employee in a bi-monthly system when compared to that of a bi-weekly system.
The paydays are very inconsistent, and it is quite hard for employers to calculate the payment-making dates for the employees.
Most companies tend to pay for two days a month for their employees in a bi-monthly system. Thus, the employee tends to receive a set of two paychecks in a month.
But this tends to be a high package, but it does get complicated for the financial management team in an organization to have a tough time considering the dates of salary provision and the dates of work schedule.
This system is also preferred by the employees as it is easy for them to plan their budget. Since it is finite and deciding dates are set and provided on a two-day trend per month.
The hourly processing is slightly complicated when compared to that of the bi-weekly system. The scale of pay is also considerably large in terms of a bi-monthly system of payment.
Whereas in the bi-weekly system, the scale of pay is comparatively lower for the employees.
Main Differences Between Bi-Weekly and Bi-Monthly
- Bi-weekly involves payment every fourteen days and bi-monthly involves payment twice a month.
- The processing hours are simple bi-weekly, and it is quite complicated bi-monthly.
- Employees prefer a bi-monthly payment structure as it is quite easy to plan their budget further.
- The bi-monthly system involves exactly 24 pay dates, whereas bi-weekly involves either 26 or 27 days.
- The employer finds it hard to calculate the payment dates bi-monthly, whereas it is quite easy for bi-weekly.
- http://research.fas.harvard.edu/files/research/files/biweekly_salary_transfer_tool_instructions_rev061014.pdf
- https://www.fcsa.org.uk/all-change-for-umbrella-companies-from-april-2016/
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Piyush Yadav