You know what it is and how it works the biweekly payment? Do you know the rules of this benefit? What are your payment methods, in addition to the advantages and disadvantages?
This benefit can make your business more competitive vis-à-vis your competitors, in addition to attracting and retaining professionals. But, for this to happen, it is necessary to understand the particularities of this wage advance.
With that in mind, we bring you detailed content on:
- What how fortnightly payment works;
- What does the law say on the subject;
- Which biweekly payment methods;
- How to calculate it;
- Its advantages and disadvantages.
Find the answer to these and other questions in today's article.
What is the fortnightly payment?
The biweekly payment, also called advance salary is the partial advance payment of the employee, referring to the days already worked in the current month.
How does the fortnightly payment work?
The company grants a portion of the salary to the employee before the effective salary due date.
The amount is normally deducted from the payroll and must obey the particular rules of each organization.
What are the biweekly payment rules?
If the company chooses to offer a biweekly payment, this becomes the right of all employees, without exception. Regardless of position, training or age.
Generally the amount paid is 40% in relation to the monthly salary. In most companies, this benefit is paid between the 15th and 20th of each month.
Therefore, it is up to HR and the finance department to organize a payment flow so that the benefit is not made in any way. It is necessary to be attentive to the financial risk management and avoid future headaches.
How can the fortnightly advance be made?
Basically, there are 3 ways to offer the wage payment:
It is up to the managers to analyze the financial and social situation of the institution to decide the best option.
Learn how to calculate your fortnightly payment method
Calculating the payment amount is simple and quick. Learn to follow.
Let's assume that a worker's salary is equivalent to £ 1,000 and he wants to receive for the 15 days already worked. Thus, the calculation will be:
1,000 (wage) x 40% (or 0.4, referring to the standard advance percentage) / 30 (the days of the month) x 15 (the days worked) = £ 200.
There are no discounts on advance payments or biweekly payments, since the calculation of taxes, vacations, EHIC and other charges is levied on the full amount of the salary.
That is, discounts are made on the principal payment, the one made until the 5th business day of the month, and not on the advance. Therefore, the amount of the advance is net.
Now, watch out! Your company may experience problems if you cancel the benefit suddenly.
Even though it is a liberality, if you make several advances, always on the same dates and conditions for a long time, this action can be considered a “violation of good faith”.
This is because you will have created an expectation in the worker, who may have contracted financial obligations due to the confidence in the recurring payment.
Now that you understand better how fortnightly payment works, it is time to discover the pros and cons for your business. Continue reading.
What are the advantages and disadvantages of biweekly payment?
You can't deny that be differentiated within the corporate world it is a constant struggle. Both for the company to be recognized for its efforts and for the employees who dream of this scenario.
However, competition is no longer the only requirement for this effort. After all, we cannot forget the times in which we live! The effects of the pandemic brought even more urgency for companies to stand out, either because of the economic crisis, in increasing consumer demand and so many other factors.
Therefore, it is increasingly important for companies to invest in strategies to bring a competitive advantage. One of them is the form of biweekly payment. But how can that help?
This benefit helps employees to solve their financial issues, reducing stress and increasing productivity. In addition, when the company shows concern for its employees, the relationship between the parties is favored and intensified.
Be aware of difficulties. Without proper monitoring, the company becomes susceptible to risks and legal challenges.
If your company already has an excellent financial organization, biweekly payment offers more advantages than disadvantages. Follow:
- Unlimited cash flow;
- Improvements in the relationship with the employee;
- Employee motivation;
- Increased team productivity;
- Employee appreciation;
- Attraction and retaining talent;
Contribution so that the company has its positive image before the market. In the next topic, we will see how to take the first steps to make the benefit a reality in your company!
I want to offer a fortnightly payment method. Where should I start?
When creating your company policy, clarify topics like mission, vision and values to the employee. Remember to address the payment date and the model adopted. In addition, every newly hired employee should be informed of this benefit, preferably through a manual or contract.
It is important that both the company and the employee know how fortnightly payment works. Avoid doing it anyway so you don't have problems afterwards.
Does your company have a favorable structure to offer the salary advance? Excellent! So, one of the best options is salary on demand.
What is on-demand pay?
THE on-demand salary it is a system that allows the employee to withdraw for the days already worked, in a simple and fast way, without waiting for the payment day.
With the HR Consultants UKy, the whole process is done by cell phone. And the best: for companies, nothing changes in the payroll. And for the employee, the salary on demand is synonymous with peace of mind when it comes to resolving financial difficulties or unforeseen circumstances.
Do you want to differentiate yourself from the competition in 2021? Rethink your strategies, offer employees an improvement in their quality of life and, consequently, a more engaged worker.
Do not waste time, talk to a consultant and hire HR Consultants UKy right now.
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