Two pay months in a month
Two pay in month refers to paying twice in a month. It would mean that salary to the employees occurs twice a month. Pay dates should be 15 days while doing systematically.
However, it is not necessary to make it so. The payments may occur on first of the month or 15th or 16th of the month.
This can also occur in the middle of the month or on the last day of the month. This can be simply made random payment to employees or daily laborers.
Two pay month system is a pay cycle in which employees are paid twice a month or every half month. Employers who use a two-month payroll cycle pay their employees two times every month, usually on the 15th and the last day of the month.
If the pay date falls on holiday, the payment shall be made by the employer the day before the holiday.
Biweekly payroll system
Under the biweekly payment system, payments are made every second week. That would mean that the number of payments would depend on the number of weeks in the year. Since the number of weeks in a year is 52, the number of biweekly payments should be 52.
Payday is generally the same day of the week, such as a Wednesday or Friday for a pay period that ended the previous week. For the purpose of accounting, there are 26 periods for the biweekly payroll system.
Differences between Biweekly and 2 pay month payroll system
|Basis of Comparison||BiWeekly payroll||Two payments in a month|
|Number of Paychecks||There are more or less 4 checks in a month and 52 payment checks in a year equivalent to 52 weeks.||2 payment checks are issued in a month or 24 payment checks are made in a year|
|Paycheck amounts||The amounts to be paid are less.||The payments to be made are higher in comparison to weekly payroll employees but lesser than those on monthly payroll.|
|Consistency of payday||The day is consistent like each week pay is to be made on Fridays.||The date is consistent like each payment is to be done on 1st and 16th of each month.|
|Compliance||Regulatory compliances are very less. Only minimum wage laws need to be adhered to.||With each individual scenario, other labor laws may need to be adhered to.|
|Suitability||This payment is suitable for all the daily workers based such system.||These payroll systems are used in construction industry with temporary workers.|
Which is better?
Choosing biweekly or paying twice in a month system would depend on the needs of the business. If a large consideration needs to be made, the appropriate system would be to pay twice in a month or even ascending to paying once in a month. If the amount to be paid is lesser, this would lead to issuing checks with little amounts.
The approach to determine any payroll would be the hourly rate of employees. The accountant shall determine the appropriate mechanism based on his judgment and easiness for compliances.