Expert: Mike Wellman - 11/5/2007

Question
I work for a company that has recently changed their payroll setup from a bi-weekly system to a bi-monthly system. What benefits does this have for me and the company? I noticed that when I received my first bi-monthly paycheck that it was for 12 working days, so it should have been a lot more than a bi-weekly check, but it was under $100 more than what it should have been. What would cause this?

Answer
In the long-term, you will be paid exactly the same under both methods. Therefore, there is no particular advantage to you either way. You will have two fewer paychecks during the year but they will be a slightly larger. For example, assuming you make $20 per hour and work no overtime, your paychecks on a bi-weekly basis would be $1,600 gross. On a bimonthly basis they would be $1,733. The difference on the gross pay is only $133. Withholding etc will make it less. If you make less than $20 per hour, then the difference in dollars would be less.

Your company benefits by having to prepare payroll two times less a year.

As for the specific reason your check is less than you expected, I really can't say without a lot of details. But there could have been things the company did in the transition or you may have been put in a higher withholding bracket by adding two more days of pay than you were used to. I hope this sheds some light on the matter.