Pay period

The pay period and the payday are different dates. The period is the days the paycheck covers, and the payday comes after it ends, a few days to a week or more later, which is why a first paycheck at a new job takes so long. Every two weeks and twice a month sound alike and differ by two paychecks a year, 26 against 24, and the difference is what gives a biweekly earner two months a year with three paychecks and a semimonthly earner none. The budget is monthly either way; the schedule decides how the paychecks fit into it.

In a sentence

• "My pay period runs two weeks, Sunday to Saturday, and the check lands the Friday after it ends."
• "On a biweekly pay period there are 26 paychecks a year, so two months have three of them."
• "Twice a month is not the same pay period as every two weeks: 24 paychecks on fixed dates against 26 on dates that drift."

How it works

1. The employer sets the period and the lag. Work is counted over the period, the period closes, payroll runs a few days later, and the payday is the same weekday or the same date each time.
2. The paycheck is the period's share of pay. A salary is divided by the number of periods in the year; hourly pay is the hours in the period times the rate.
3. Deductions are figured per paycheck. Withholding uses the table for the pay frequency, and a monthly benefit premium is usually split across the paychecks in a month; some employers skip it on a biweekly third paycheck, which is why that one lands larger.
4. The schedule fixes the count. Fifty-two weeks make 52 weekly paychecks, 26 biweekly ones, 24 semimonthly ones or 12 monthly ones.

An example

The same $54,600 of annual take-home pay on each schedule.

The average month is $4,550 on every schedule, and only the last two ever receive it. The biweekly household gets $4,200 in ten months and $6,300 in two, so a budget built on the $4,550 average overstates a usual month by $350, about 8%, and the shortfall lives on a card until a three-paycheck month covers it. Budgeting the month on two paychecks, $4,200, and sending the two third paychecks, $4,200 a year between them, whole to a goal is the fix.

Why it matters

The budget is monthly and the paychecks are not, and the schedule decides how the mismatch plays out: which paycheck pays which bill, whether the first half of the month is lean because rent lands on one paycheck, and what a three-paycheck month is for. Weekly and biweekly earners also see the paydays drift. A paycheck on the 3rd this month is on the 1st next month and the 29th the month after, so a bill due on the 2nd is paid from a different paycheck each time unless it is assigned one. The mistake the term prevents is the average: 26 paychecks divided by twelve is 2.17 a month, and no month contains 2.17 paychecks.

Pay period versus billing cycle

A pay period is the employer's calendar for paying you; a billing cycle is a biller's calendar for charging you. A card statement covers about a month of purchases, closes on its statement date and is due a few weeks later, and a utility reads the meter on its own schedule. Neither lines up with the calendar month or with the paychecks, and lining the due dates up with the paychecks that should pay them is the work, since most billers will move a due date on request. See How to line up bill due dates with your paychecks.

Common questions

Is biweekly the same as semimonthly? No. Biweekly is every two weeks, 26 paychecks a year on a fixed weekday whose date drifts through the calendar; semimonthly is twice a month, 24 paychecks on fixed dates such as the 15th and the last day. A biweekly paycheck is smaller and there are two more of them.

How many paychecks a year on a biweekly schedule? Twenty-six in most years, and 27 in the occasional year whose calendar holds one more payday. Ten months have two paychecks and two have three.

When are the three-paycheck months? When a payday falls on the 1st or 2nd, or on the 3rd in a 31-day month, since the next two come 14 and 28 days later. Mark every payday on a calendar in January and circle the two months with three; they are usually about six months apart.

Why is my first paycheck at a new job so late? Because the period has to end before it is paid, and payroll runs a few days after that. On a biweekly schedule a first check can land three or four weeks after the start date.

Which pay period is best for budgeting? It is rarely yours to choose. Twice a month matches the bills, which are due on fixed dates; every two weeks needs the two-paycheck budget and a destination for the third paycheck; weekly needs each bill assigned to a paycheck too, and a plan for the five-payday months.

Go deeper

• How to budget when you're paid every two weeks budgets the month on two paychecks, assigns each bill to the paycheck before its due date, and sends the third paycheck whole to a goal.
• How to line up bill due dates with your paychecks moves the due dates that can move so both paychecks carry similar totals, with three calls in the worked example.
• How to budget when all your bills land in the same week funds a heavy week from the paycheck before it and compares the three fixes.

Where it shows up in Zypper

Zypper budgets income on the schedule it actually arrives. An income category can be set to a frequency of Every two weeks, Twice per month, Every week or Every month, and its row shows Earned against the amount, with $X remaining for what you still expect this month and $X extra when the month brought in more than you budgeted, which is what a third paycheck reads as. Bills in your spending categories count as money already spoken for from the start of the month they are due, at their usual amount before the charge arrives, so the half-month picture stays honest whichever paycheck a bill lands after. See Creating your budget and Recurring bills in your budget for the details, or get started with Zypper to budget your own paychecks.