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I have recently moved roles from a company where I was paid on a monthly frequency to a company where they pay on a bi-weekly frequency (every two weeks).

I have found it difficult to adapt as I prefer to be paid my full monthly salary in one go.

From one perspective it seems there is an implication that employees are incapable of handling their full monthly salary in one go so the company has to "nanny" them by only giving them a little bit at a time. (This is probably only my perception of this company though).

This practice made me wonder if it was more advantageous to the company when they pay on this frequency and if so what are the advantages to the company?

What are the advantages to employees of a monthly salary?

closed as too broad by paparazzo, gnat, DarkCygnus, IDrinkandIKnowThings, JasonJ Feb 21 '18 at 15:24

Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

  • Biweekly or semimonthly? There's a slight difference Also depends a little on the holiday and vacation schedule for you and your country/state, e.g. if you work fewer work hours in Nov/Dec/Jan or July. How specifically have you found it "difficult to adapt"? You just calculate how much you need to keep in your checking/current account. – smci Feb 19 '18 at 0:24
  • I retitled it from "What's the most advantageous..." which is going to be subjective to "What are the pros and cons...", because everyone's situation is different: rent vs mortgage, family vs no family, save vs splurge, predictable outgoings vs unpredictable or impulse, part-time/multiple jobs vs full-time. – smci Feb 19 '18 at 0:28
  • Maybe try Personal Finance & Money? money.stackexchange.com – Rupert Morrish Feb 19 '18 at 0:52
  • Is it biweekly as in, you get 26 to 27 paychecks instead of 12? Seems more fair to the employee as you won´t get differentiating pay depending on longer/shorter month ... – Daniel Feb 19 '18 at 8:13
  • Why is this question getting mark down? It’s a valid explanation & question. It didn’t need to be modified by a moderator who made the question confusing with their modifications. – motionpotion Feb 19 '18 at 8:26
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The biggest advantage is that you get a bigger lump sum to buy with when you get paid. I actually prefer monthly payments because it's cheaper to buy groceries in bulk and I'm a long way from town.

Your biggest danger is running out of money during the month and having to wait until payday. So you need good budgeting skills.

For the company I have found that the advantage is mostly in accounting, you have less hands on payroll work to do. I can't think of any disadvantage to a well managed company.

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Most bills are monthly, so monthly pay is good. However, when it comes to loans or mortgages, being able to make payments every 2 weeks saves interest.

  • Your answer relies on the premise that the monthly wage is payed at the end of the Month and that one does not keep an emergency-fund and the Bank allows for a non-monthly payment plan. – Daniel Feb 19 '18 at 8:19
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Since you are paid in arrears-- your paycheck covers the work you did previously rather than being paid in advance for work you are going to do-- it is best for the employee to be paid as frequently as possible. Once you've put in 8 hours of work on the first day of the month, you're better off getting paid for that time as soon as possible rather than letting the company hold on to the money for another 30 days until the end of the month. You'll have the same amount of money at the end of the month, you'll just have some of your money earlier.

Conversely, it is (slightly) better for the company to pay less frequently. The company earns a bit of money off the float of holding the cash they owe in salary before they pay it out. The longer the company can hold the money, the more they make.

That's why there are generally laws that limit how infrequently a company can pay its employees. For example, in the United States, there are more than a few states where you can't legally pay employees monthly or that limit which employees can be paid monthly. The Department of Labor has a table of the allowable pay frequencies for each state. Most other countries will have the same sort of regulations. Personally, I haven't come across a US company that had monthly payroll.

  • 1
    Here in Australia, monthly pay for salaried employees is generally half in arrears, half in advance. e.g. I get paid on the 15th of the month for all the work in that month. – Carson63000 Feb 19 '18 at 7:55
  • Here in Germany I am currently also payed monthly at the 15th. But I think that can be anything the employee agrees to. Did not ever encounter any non-monthly job – Daniel Feb 19 '18 at 8:40

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