More frequent checks can make cash flow easier, but the smaller amounts may encourage spending without a monthly plan.
Pay period guide
Pay frequency changes cash flow, not the annual gross salary.
Use the same annualized figure when comparing offers, then use the pay schedule to plan monthly bills and savings.
Four common schedules
How often do paychecks arrive?
| Pay frequency | Checks per year | Typical paid hours | Gross pay at $25/hour |
|---|---|---|---|
| Weekly | 52 | 40 | $1,000 |
| Biweekly | 26 | 80 | $2,000 |
| Semimonthly | 24 | About 86.67 average | About $2,167 |
| Monthly | 12 | About 173.33 average | About $4,333 |
The $25/hour example assumes no overtime and no unpaid leave. Semimonthly and monthly “hours” are averages because calendar months are not equal.
Same annual pay
Why 26 biweekly checks do not create extra salary.
Biweekly means every two weeks, so a normal year has 26 checks. Some calendar years contain a 27th check because of the placement of pay dates. The extra check changes that year's cash flow, but it does not create an additional 27th of annual salary.
Semimonthly is not the same as biweekly
Semimonthly pay happens twice per month, usually 24 times per year. Biweekly pay happens every two weeks, usually 26 times per year. The annual gross total can be the same while the amount and timing of each check differ.
Budgeting
Match the pay schedule to the bills it has to cover
Two extra checks in some years can be treated as a buffer rather than automatic spending money. Confirm whether deductions and benefits repeat in the extra check.
One check per month creates a longer gap between deposits. Build a buffer equal to at least one month of essential expenses where possible.
Check the paycheck
Verify these five items on the pay stub.
- Gross pay for the period and year-to-date.
- Regular hours, overtime hours, and the applicable rates.
- Federal, state, and local withholding.
- Benefit and retirement deductions.
- Employer contributions and paid leave balances.