OT - bi-weekly paydays

[DaddyChoc]

have you ever worked this way?

what's the benefits of a company going from weekly to bi-weekly?

 

[Icebear]

have you ever worked this way?

what's the benefits of a company going from weekly to bi-weekly?

What is the size of the company? # of employees, etc.

It does two things in general. 1) Reduces the amount of hours spent of prepping weekly payroll by doing it every two weeks and if they are outsourcing their payroll costs it may therefore reduce their contract costs. 2) Allows funds to remain in their accounts longer eeking out a little more income off it. If the company is big enough this can add up longterm.

 

[DaddyChoc]

10,000

 

[Icebear]

10,000

Think about that for a bit 10,000 less payroll preps every 2 weeks or 260,000 per year and may the elimination of an employee in house or that smaller contract if outsourced and for easy calculating $500 times 10,000 or 5,000,000 dollars left in the company pockets for 26 weeks a year on interest. Even at a 2% interest rate that is $50,000. It is more complex than that but it is a quick highlight of the possibilities.

 

[FairView]

I'm amazed that the payroll isn't already bi-weekly.
Ice is on target with cost savings concept -- it saves a lot of time and money. The only potential downside as an employee is with lower income employees who live paycheck to paycheck. They need to better manage their money and resist splurging.
The company also has a challenge with annual payroll costs. The way the calendar works, every few years (I forget if it's five or six) a company would be confronted with a pay schedule that has 27 paydays in a fiscal year instead of 26. That can be a big hit. I remember it actually made the news one year when Cigna reduced the amount in employees paychecks for a year to compensate for the extra payday. People were not happy. When I worked for IBM, they eliminated that potential problem by paying us twice a month -- something like on the first and the 15th. That eliminated the two "bonus months" with an extra paycheck that we would do something fun with or throw into savings.

 

[Phil]

I get paid bi-weekly, but think the semi-monthly option is better.

 

[meyers7]

I've gotten bi-weekly for years.

From a company's point of view seems like it would save money not processing every week.

 

[Vowelguy]

I get paid bi-weekly, but think the semi-monthly option is better.

When my company was acquired a few yrs ago we went from semi-monthly to bi-weekly. I liked the former better since most bills are monthly. Now we have some months with 2 checks and some with 3.

 

[Adesmar123]

The company also has a challenge with annual payroll costs. The way the calendar works, every few years (I forget if it's five or six) a company would be confronted with a pay schedule that has 27 paydays in a fiscal year instead of 26.

It works the same way with weekly checks. There are 53 paydays some years with weekly checks. It twice as many as biweekly checks - make sense?

Its tough on employees during the changeover. They go a week without a check but get twice as much the next week. They just need to plan.

There is a cash flow difference to companies between the two obviously. But to companies who accrue payroll for their financial statements it makes no difference.

One issue though is it makes a company decide how you salary. Annually with biweekly payments - no 27 th check or true biweekly with a 27 check. Hourly workers don't have to deal with this.

 

[HuskyFan1125]

I have been getting biweekly for probably 15 years now and I don't mind it all.

Just have to budget for a two weeks at a time but its quite manageable.

 

[FairView]

The company also has a challenge with annual payroll costs. The way the calendar works, every few years (I forget if it's five or six) a company would be confronted with a pay schedule that has 27 paydays in a fiscal year instead of 26.

It works the same way with weekly checks. There are 53 paydays some years with weekly checks. It twice as many as biweekly checks - make sense?

Its tough on employees during the changeover. They go a week without a check but get twice as much the next week. They just need to plan.

There is a cash flow difference to companies between the two obviously. But to companies who accrue payroll for their financial statements it makes no difference.

One issue though is it makes a company decide how you salary. Annually with biweekly payments - no 27 th check or true biweekly with a 27 check. Hourly workers don't have to deal with this.

Of course it also happens with weekly payroll. I think the difference is that companies are more apt to take a hit of 1/52 of their payroll as an additional charge than they are to take 1/26 as a hit. I also wonder if the remaining weekly payroll companies have more hourly workers and less salaried. I've never heard of a company changing weekly payment amounts, but i have heard of it for bi-weekly.

 

[Adesmar123]

Of course it also happens with weekly payroll. I think the difference is that companies are more apt to take a hit of 1/52 of their payroll as an additional charge than they are to take 1/26 as a hit. I also wonder if the remaining weekl payroll companies have more hourly workers and less salaried. I've never heard of a company changing weekly payment amounts, but i have heard of it for bi-weekly.

There is no "hit" for companies that accrue payroll. Each year you accrue one or two additional days along with the 26 or 52 pay days. So a company would have 26 pays plus on their books each year. So when the 27th comes its still 26 + one day expense. Of course for companies on a cash basis it doesn't work that way.

 

[KnightBridgeAZ]

Yes to Adesmar, I was paid bi-weekly for years and never missed a paycheck, I'm sure the company accrued the payroll on the books.

I worked in a movie theatre company home office with numerous field locations (theatres). So they processed a payroll every week - just half of the theatres one week and the smaller half plus home office the next week. Worked well.

 

[Adesmar123]

Knightsbridge..Is your screen name related to the Stones lyrics, or just a coincidence?

 

[ed4ourgirls]

During the last days of the German hyper-inflation in Oct/Nov 1923, employees were often paid
twice DAILY and given time to do grocery shopping as prices were rising by the hour. Many workers
had contracts where their wages were tied to the inflation rate, so they were not hurt as badly
as those on fixed incomes whose life savings were rendered valueless.

For the USA, the great economic horror story of the 20th century was the Great Depression. For
the Germans it was that horrific and ruinous runaway inflation, and those differing experiences
and national memories have given rise to somewhat different emphases in their respective economic policies.

 

[KnightBridgeAZ]

Knightsbridge..Is your screen name related to the Stones lyrics, or just a coincidence?

No Stones lyrics here. Knights as in Scarlet Knights, I live in AZ now. Bridge between RU and AZ?? - I'm not exactly sure how I came up with it unless it was subconscious.

 

[Adesmar123]

No Stones lyrics here. Knights as in Scarlet Knights, I live in AZ now. Bridge between RU and AZ?? - I'm not exactly sure how I came up with it unless it was subconscious.

Sounds to me like you are "Playing with Fire"

 

[Icebear]

Sounds to me like you are "Playing with Fire"

Ah yes, blended with Cool Jerk by Todd Rungren.