Determine the payment amounts for employees on a bi-weekly pay system by calculating the annual salary of each employee and dividing it by 26, which accounts for issuing one paycheck every two weeks. If the employee works on an hourly basis, employers much implement a time card or timesheet system to track the actual hours each employee works during a two-week period.
Many companies that feature salaried employees implement a bi-weekly payment schedule in order to allow for a standard payment system with a clear definition on the payment amounts. The calculation process begins by finding the employee's base salary for a single year, before any bonuses or incentive payments, and then dividing it by 26. The company must then designate the exact payment dates for each paycheck to ensure that the employee receives the payment in a timely manner. Some states enforce specific requirements for the time frame in which employers must issue paychecks.
A bi-weekly pay method is different from a semi-monthly payment schedule, wherein the employee receives two paychecks each month. This system results in 24 paychecks rather than 26, and typically includes an exact date each month on which the employee receives the paycheck. If the company has hourly employees, it must track the exact number of hours the employees work in each payment period, either bi-weekly or semi-monthly, and then issue the payments for the corresponding amounts within a certain number of days of the completed period.