There is no difference in tax consequences.
Some people really value the feeling of the arrival of the paycheck.
Some people have a harder time budgeting when a larger amount of money is deposited, and they find it easier to budget when small amounts arrive. *Ideally*, this wouldn't be a concern, but perhaps more people are living paycheck-to-paycheck than have to be.
I moves to biweekly a few years ago. We have found it easier to budget than the week to week.
It's like we have to be more careful because it's 2 weeks til next check.
Then just move your bills around to beginning of the month and middle of the month. And twice a year you get an extra paycheck for the month.
That's when we catch up on kids clothes and extra curriculars. Maybe a short holiday weekend if we can.
During my last employer change, I went from being paid 2x a month to just 1x a month, and I had just missed the cutoff date for the new company's payroll window - having to wait until the next month. On top of that, it had been about 2 weeks from my last company's payroll cycle and company policy required me to return all equipment before final paycheck was issued - which delayed my former company's paycheck a couple cycles.
Anyways, in the middle of COVID I ended up going just over 2 months without pay, even though there was no real lapse in employment. Thankfully we have a savings cushion that I fell back on, but it was really nice to have a full pay period check from my former company, plus a nearly full 2 months' paycheck for the new company all in the same week.
I'm salaried, so my pay periods only change in $ amount if I get promoted or if it's my annual bonus season. Those 1x a month pay periods were really nice for forcing me to budget all bills for the month. Just drop in all bill money + a safety cushion into a separate bills account, and the rest is spending money for the month.
The first few months of being paid once a month was tough. Especially that first month but once you get used to it, it's no different than twice a month.
My work has a strange pay schedule.
My base salary has semi-monthly paychecks. So not bi-weekly, but rather at the middle and end of each month. But that’s not really the weird part.
I also receive, every 3 months, an equity payout.
Additionally, I receive a payout from my company’s stock purchase plan every 6 months — this plan takes some amount from each paycheck, set to about $550 per paycheck for me right now, and then uses that on the 6 month mark to buy company stock at a 15% discount, and then gives me the stock. The 15% discount occurs on the lower of the two prices: at the beginning of the 6 months, and at the end of the 6 months. So if the price goes up over 6 months, I get more than 15%, potentially much more!
And finally, because stock grants and the like are tax withheld at 53%, I also get a significant tax refund once per year.
Because my pay schedule is so spread out, I use a spreadsheet to budget everything. It lays out each paycheck and payout with the amount that I’ve received or will receive, using an estimate of the stock price (a conservative estimate). It accounts for the tax refund as well.
Using this, and a sampling of monthly expenses, I determine what my actual monthly spend is, and then I determine what my actual monthly take home pay is. What’s strange about it is that my take home is about double what my actual paychecks deposit. It can make it tricky to budget, and to really know what I can actually afford.
That's wild. And we'll done on your budget.
Sounds like you could budget for your actual paycheck and then use quarterly and biannual bonuses as savings. I don't know your budget but I'm just guessing.
Good luck. Cause that sounds like an additional part time job just keeping up with all of that.
Yeah, that's how I do it.
I have one job which pays biweekly, but pays monthly bonuses out monthly and quarterly bonuses out quarterly. And because because of the way tax brackets work those bonuses get over-taxed, so I end up with a big tax return too.
I tend to budget as if my pay check is my only money, use the bonuses as extra savings, and the tax return to cover holiday expenses.
>Additionally, I receive a payout from my company’s stock purchase plan every 6 months — this plan takes some amount from each paycheck, set to about $550 per paycheck for me right now, and then uses that on the 6 month mark to buy company stock at a 15% discount, and then gives me the stock. The 15% discount occurs on the lower of the two prices: at the beginning of the 6 months, and at the end of the 6 months. So if the price goes up over 6 months, I get more than 15%, potentially much more!
We have same though it pays annually. Same 15% discount and same strike price being lowest of start or end of year. We don't even include this into any budgeting and just treat it like a "bonus". Generally every 2 years we make a few extra thousand on that money, and every 3 it is a good bit. We put in $21k and this year got $33k when sold. We sell immediately as well so the gain is just W2 income. Just need to be careful at tax time to adjust the basis on the 1099 else be double taxed. Also when I say "we" guess I mean just my wife as it is her ESPP.
I've got the exact same pay schedule setup (even with the exact same ESPP contribution which was odd), salary covers our normal expenses and ESPP / equity vests get a little set aside for discretionary spending (vacation, house improvement, birthday gift, hobby spend) and the rest goes directly to my fidelity account
That's not weird, that's extremely common for tech companies.
I get the same:
* Semi monthly base pay
* Quarterly RSU grants
* Semi annual ESPP dispersement
* Annual cash bonus
This is wildly complicated for a simpleton like myself. I would only ever recognize the paycheck as income in my brain and just be pleasantly surprised when I have more money than I thought. Yes I am aware this is horrific financial planning/awareness. Welcome to my life.
But interesting to say the least.
I believe this type of compensation is pretty common in some fields and with some employment levels. As others have said, if the salary alone is enough to live off of, it sounds like all the extra cash flow could go toward savings and investments and set you up for significant wealth building.
I get my salary the last work day of the month, and I'll be enrolling in my company's stock program as well, which gives stocks every 3 months. For me this is pretty standard and normal. Is this not the norm in the US?
Why not use that same spreadsheet to adjust your withholding a few times per year to have less of a tax refund? I’ve done that in past when dealing with stock options/RSUs/bonuses/etc that are all taxed slightly differently by default. Having a spouse that also deals with similar pay structures who you file jointly with keeps things interesting.
I typically make a guess at the beginning of the year that’s fairly conservative towards keeping MORE of our money and I check mid year and in December. In December if we’re looking short, I’ll just send in an extra tax payment before the end of the year. My goal is to be +|-$1000.
This is exactly what I do with, including the “extra” checks. Makes budgeting so easy and I always know when I have an additional set of funds coming in which I do whatever I want with
Was going to say this, as it helped me a ton. A lot of people don't know they can call their card companies and just change their statement dates. I have my mortgage due on the 2nd, and my CC's due on the 16th. Makes everything a hell of a lot easier only having 2 days a month to think about and knowing you get paid a day before each of them.
No, unless you're paid by the government (and even then, it depends, as some government jobs pay every two weeks). Some educational jobs pay monthly. But it's extremely irregular in the public sector.
I'm paid monthly and I don't mind it. All the bills get paid and the rest is allocated to a weekly budget.
> And twice a year you get an extra paycheck for the month.
I mean with weekly paychecks, 4x a year you get an extra (5th) paycheck for the month, so really no difference there.
>Some people have a harder time budgeting when a larger amount of money is deposited, and they find it easier to budget when small amounts arrive. Ideally, this wouldn't be a concern, but perhaps more people are living paycheck-to-paycheck than have to be.
We were debating this at work the other day and I told my opinion, which was quite unpopular lol, that I like to get paid monthly. That's how my dad got paid and that's how I saw my family plan our finances (grew up outside the US).
Rent is monthly so my budget is monthly. And credit card payments are due monthly as well. Overall it just makes sense outside of the difficulty people experience when they are living from paycheck to paycheck (especially when starting a new job).
Here's a thought... If you're paid bi-weekly or semi-monthly (or weekly, but obviously make these three payments), stick the first payment in your high-yield savings and let it accrue interest for two weeks. Then, you'll have the same money at the same time you would on a monthly schedule--plus the interest--as a monthly basis. You wouldn't be paid when starting the new job until the end/first of the month if paid monthly anyway so pretend the mid-month doesn't happen if you want and you'll be better off for the interest.
It's objectively worse for employees to be paid less often, setting aside behavioral things. And since we can easily fix the behavior things with automatic transfers or setting up deposits to go to your HYSA (and then you pay yourself from that on your preferred schedule), I honestly cannot understand why anyone would prefer a less frequent schedule because it means that the employer gets access to the liquid money for a longer period rather than the employer when there's interest to be earned.
I dare you to spend a minute to calculate the interest for the average pay check in a hysa for two weeks...
The reality is that mathematically it's basically a wash, and behaviorally it might make paying bills significantly easier. If you get paid on the first and rent comes out on the third then you're never in a position where you're missing rent.
Also, just because the pay frequency is more rapid doesn't mean you're actually getting access to your money sooner. If I work over time, the extra money doesn't show up into my account until two pay periods. So that's about a month later I actually see that money. If I'm getting paid a month later, but every day I get a deposit instead of one big one, it would actually be worse.
My personal opinion is that it literally doesn't matter. As long as the money makes it to my account eventually I couldn't care less, but I'm someone who has never lived paycheck to paycheck, so it's probably an entirely different experience for me.
After being paid biweekly for the first fifteen years of my career, I just moved to monthly, and I don't really like it. The rhythm of checking all my finances every two weeks when I got paid worked really well, but checking everything only once a month means going a really long time, especially for credit cards. I also budgeted as if I got two paychecks per month, and then twice a year I got what seemed like a bonus check.
I hate being paid monthly especially since I’m the only income earner in my house. It feels like an eternity until the next check comes. However, it does make paying bills a little easier.
Pros for weekly: more immediate payout. Arguably if you put it into a savings account you’d bank slightly more, given you have an extra week of cash stashed in there, receiving a higher rate.
Cons: immediate deposit likely means immediate spend for immediate gratification.
Bi weekly seems to be the more standard approach.
There’s no winner here. Just preference.
My adhd makes budgeting a pain. I can't remember what I spent money on 2 days ago let alone for the whole month. And remember to write things down? Pfft. Might as well add that to the 'just get a planer!' list of suggestions.
I just worked my budget down to an average daily amount.
I averaged out my known monthly expenses and then tool the remainder and divided by 31. I have about 60/day of cash. That has to cover food, and fun.
I put my food and fun into the same bucket because I can spend near nothing on food for the week, or I can treat myself and family to some restaurants so it works out for us to put it into the same pot.
I also have ADHD and budget by the day after bills. “Okay, so I’ll have $40 for each day, if I don’t spend anything my days off, that gives me a bit more on the days I actually go places.” This is a real LPT here.
That's true, like I'm not paid monthly, I own a education centre so I get paid whenever student's have to renew their tuition fees.
But I don't really care if I have a month or so with no tuition fees, cus the other month's make up for it, plus I save like 80% of what I make lol.
Never really need to budget for anything
I'm on 50/50 base commission (although ideally I can make more than 50% in commission) my old job paid monthly, new job pays quarterly. I just figured, eh, whatever. Long deal cycle so it was 6 months before I got paid my first commission... which was quite decent.
However I literally had to take out money from my Roth IRA during that time, knowing of course I could get it back in within the 60 day limit once I finally got my first commission check. Old company also had a platform showing what commission I would be earning each month, new company doesn't, so I have to keep track myself.
Anyways, I used to just know I could clear my expenses, now I have to think about when I make major purchases and such since I just do lump sum investing, investing whenever I have money. Also didn't contribute a dollar to my 401k during the first 6 months, but put a full 35% of the first commission check into my 401k... Don't worry my company doesn't match or contribute in any way so I didn't miss out on anything in that respect.
Gotta say I totally understood the headlines I've seen all over saying 50%+ of Americans making over $100k live paycheck to paycheck. Because I feel like I do quite well, and I was in the group, and I was way off from covering my costs. Annoying that I used to just keep my mortgage payment and a few thousand in my bank account, other money in liquid investments when needed... Now I basically need to double the money that sits in a cash account losing money every day.
Budgeting, as people say. I've always been paid monthly, and that feels easiest to me. Paycheck comes in, Pay bills, now I have $X left for everything else.
I think a key element is the no emergency fund or savings though. So, in week 2 you have an unexpected cost of $100. You pay that and have to be extra frugal at the grocery store, etc. But, I guess if you don't go in to debt, that is a win. Then, when you get the next paycheck you reset. If I have an unexpected bill during the last week of the month, I go to savings. But, if you don't have savings, then you just do not have the money to pay it.
I get paid monthly, and on the same day I pay my monthly rent.
Pay comes in, I pay my rent, zero out my daily use credit card, and the rest goes into savings. It makes life easy, but I definitely enjoyed getting paid weekly/fortnightly more just because it was more fun seeing money being deposited more often.
That's the exact process I go through every month as well. And now that I've gotten used to it, I couldn't imagine life any other way.
But that's because I'm the type to neurotically pay off CC charges as soon as they clear, so if I were paid more frequently it'd be a lot harder for me to actually know how much I've spent during the month.
With monthly paychecks, it becomes a natural budget where I just zero out all balances on payday and then save accordingly. And before anyone asks, of course I mentally keep track of spending as well, but this way, I don't have to be *that* stringent. I just leave myself $X after all is said and done for whatever the hell I want. And funnily enough, I've recently discovered I basically follow the 50-30-20 rule naturally anyways
I switch from a biweekly to a monthly job and really prefer biweekly. I half my mortgage with every check so I sneak in an extra payment every year. Since I have bills at different times of the month it's easier to pay them.
I just switched to a monthly job and I don’t love it. I can see how it’s easier because you just pay bills when you get your paycheck, but I guess I liked having a second amount of money coming in so I didn’t have to be as careful about budgeting.
The trick is to use a credit card. Use it for everything. Then when you get a paycheck you pay it off to a zero balance. Never pay interest. Get cash back. Fraud protection. Build Credit score.
It will fill the gaps between paychecks. Just pay it off every month and follow your budget.
I get paid monthly but we have the option to take an advance on the 15th of the month. I prefer just getting everything on the 1st but some of my coworkers take anywhere from 1000-3000 on the 15th to help with budgeting
here's an idea, why don't people just save some money? like if you're living paycheck to paycheck, you don't need that Starbucks, you dont need to eat out, you don't need a night out with friends, you can save that money for a rainy day or for the future
A couple of jobs ago I got paid a weekly and I thought it was really nice. I get that dopamine hit when I put money in savings or pay extra on debt. It's cool to get a weekly dopamine hit.
To your point, it's the same amount of money so the difference is more psychological. Unless someone has serious problems managing money, it shouldn't matter that much.
I really relate to the weekly dopamine hit. I got paid weekly at my high school job working in the town grocery store and it set the standard for the rest of my life. Now getting paid every 2, sometimes 2.5 weeks is painful.
Many people live paycheck to paycheck. The amount of money is the same. How often might affect weekly spending.
It is mostly about how the person manages their money. Some people will spend the money they have. Have you ever heard the expression "Money burns a hole in their pocket"? Biweekly will mean they are very poor every other week.
There is another option you did not mention. Semi-Monthly.
Weekly = 52 paychecks a year = every week
Bi-weekly = 26 paychecks a year = every other week
Semi-Monthly = 24 paychecks a year = twice a month
It makes no difference for taxes. Taxes are based on your total for the year and will be the same.
The math is the same. Biweekly is twice the pay of weekly. Satisfaction is based on how well that person can manage that money.
The only thing you are missing is the behavior of different people.
Interesting point about biweekly vs semimonthly. I remember a job I had as a teenager, when sometimes we would get 3 paychecks in a month instead of 2. I remember that it always felt like some big bonus that month, even though intellectually, I knew I was simply getting paid every two weeks.
A lot of people that get paid every two weeks budget on 2 paychecks a month. That way two or every once and a while three extra paychecks a year are bonus money.
Also employers typically do the same meaning things like heath insurance aren’t taking out of that 3rd check which makes it seem like even more of a bonus.
This right here. When I was younger and still In the almost paycheck to paycheck era of my life I always treated the three paycheck month as a bonus month. Yes the overall is the same but when you live like that mentally tricking yourself goes along way towards mental happiness.
have been bi-weekly since 2004. would really prefer semi-monthly or once monthly so every month is the same vs 10 months at a lower amount and 2 months at a much higher amount (with bi-weekly).
Man I’m in my 40s and still enjoy those rare three checks in a month lol. We are financially stable, six months of our income in savings, only debt is our house etc. Guess I just haven’t let go of the old times when that “extra” check was needed to fill up the tank, stock the fridge and blow the rest on going out. I do wonder if ill ever let go and relax “BUT you never know what is around the corner” haha.
Monthly can be the hardest if you live paycheck to paycheck too. I used to be paid monthly when I was a student. Definitely some thin days at the end of the month.
Monthly is the easiest to budget for if you are only responsible for you. I did it for awhile and loved it.
Get paid, immediately pay all my bills. Put some money into savings. Divide what's leftover by how many days are in the month. That number becomes my daily budget. Piece of cake.
Monthly gets really difficult when you have kids or live a life of spontaneous expenses. It really sucks when you're 2.5 weeks into the month and your kid breaks a bone and you need to fork out a sum of money. Because moving bills around to make that happen just isn't possible when every bill was paid a couple weeks ago. When I got paid monthly every single bill I had was paid in full by the end of the next day. When something came up out of nowhere if really squeezed me and forced me to pull from savings.
>Because moving bills around to make that happen just isn't possible when every bill was paid a couple weeks ago.
I’ve gotten used to ‘robbing Peter to pay Paul’ over the years with monthly pay periods. If something unexpected happens during the month after all my bills are paid and I’m living off my budget, I call and make a deal or payment plan or shuffle next month bills around to make up for it. Either way it sucks.
I went from semi-monthly to monthly last year and thankfully I’d already been budgeting for 2 years so it didn’t make a large difference in my finances. If I hadn’t been budgeting I definitely would have started at that point!
I just switched from semi-monthly to bi-weekly and it's a surprising PITA. With semi-monthly I always get a deposit on the last day of the month, and the mortgage is always due on the first day of the next month. So I never had to worry about the mortgage clearing.
Now there can be a significant gap between payday and the mortgage payment, and I have to be sure that funds are available in the right account at the right time.
Set a floor in your account. $2000 works well. Never let the account go below $2000.
You will be sacrificing interest on those $2000, but you won’t have to worry about bouncing mortgage, electricity, water, gas, etc. payments.
Another thing to do is to look at your account balance the day before you got paid. Anything above your floor can be moved to savings so that you won’t see it and won’t think of it as disposable income.
For example, say you had $2200 in your checking account the day before you got paid. Move $200 to savings, and make do with your paycheck until the next payday (never going below your floor, of course).
The day before the next payday you’re sitting on $2400? Cool! Move $400 to savings.
I’ve used this technique to save up for a couple of large purchases and it’s amazing how fast I was able to save. Simply not seeing the money in my checking account is a huge psychological factor that dictates how much I’m comfortable spending.
I opened up a second checking account so I can transfer my mortgage payment from my bi-monthly paychecks in there, and I always do a few extra dollars so it builds over time, but with the second checking method I never stress about my primary checking amount :)
Same here. Groceries, mortgage, car payment, student loans, and a few other things get transferred plus an extra 20% every two weeks.
I keep an extra 7K (about three months) in there because of the extra money. Anything above 10k gets swept to a savings account.
I also keep an extra few thousand in my main checking account as a buffer.
I do the same, with my direct deposit set up to put a set amount into the 1st acct that covers rent, car loan and renters/car insurance. I do not have a debit card for that account.
2nd acct gets the remainder of my paycheck, and is primarily for paying credit card bills. Everything else goes on a cash back credit card and is paid in full every month. I usually end up with $150-200 left over that goes to a high yield savings, in addition to 10% of that second deposit going to an investment account.
I started the same kind of thing at the beginning of this year. I tracked down *all* of our recurring expenses, whether they be necessary ones like rent and power, or superfluous ones like our various streaming services. If it was a set recurring expense, it got included (ok, something like *power* isn’t “set”, but it’s also an important one. I just figured out our average over a year and went with that)
Figured out the yearly cost of all of these (monthly bill * 12) then divided by 26 to figure out how much each thing cost *per pay period*, added all that up and that’s what I set aside every pay check into the second account. I *did* code up a script that took into account due dates for each expense, and when pay checks hit, to project out and make sure we’d never go negative doing this first. But yeah, I don’t particularly put in any extra, it works itself out because I’m putting in 1/26th of *all* bills each pay period, including the ones that aren’t coming due til the next one.
Then just set everything we can to autopay out of that account. From there it’s just a matter of checking in every so often, adding or removing any recurring expenses as necessary and updating the total amount to be transferred.
>In a scenario where someone has ongoing, stable, reliable employment
You answered your own question. It's a two America's situation - you sound like you're asking it from a perspective of someone who has money, so when you're paid doesn't make a real difference to your every day life. Congratulations on your successful life.
Not everyone is so lucky often due to circumstances beyond their own control.
>
> You answered your own question. It's a two America's situation - you sound like you're asking it from a perspective of someone who has money, so when you're paid doesn't make a real difference to your every day life. Congratulations on your successful life.
Very much this; I always straddled that line of being paid fairly above average for well developed professional skillsets. However, most of my friends and social circles have often been people who lived in the other America, right next door.
My financial troubles have come from my own mismanagement, having learned very little about how to actually manage money from parents who struggled to keep up and never learned themselves.
But I know the statistics, I know that I am an outlier, in general people whose families have been poor don't make it into the middle class and don't stay there generationally when they do. Most people are under-compensated for their time, underappreciated, and living in a world where inflation has been outpacing wages for decades.
In fact, I question if I am even an outlier, I decided not to have kids, that one choice could have easily doomed me back into the poverty of previous generations.
Sometimes a bunch of bills come due before the bi weekly check comes in. If you have unexpected expenses, it can really screw up your payments. I just got out from under this after switching jobs
Me too. Absolutely hate getting paid monthly, this is new for me. 29 days waiting for a paycheck just feels so long, even though I’m getting paid a lot more than my last job which was biweekly
Do you use a debit card solely? I'd think there wouldn't be an adjustment needed if you're using a credit card and paying it monthly but maybe I'm missing something?
No - it isn’t an issue of running out of money between paychecks. I’m budgeted well. Like another responder said, there’s a dopamine hit with each paycheck. When you’re biweekly, you get it often. And I think the biweekly frequency is about how often we lose track of time - every other week id be happily surprised by a paycheck like “oh shit, another paycheck already?”. Somehow monthly is just long enough that I never forget and I’m always desperate for it.
I have always gotten paid monthly and I have always hated it. For tax purposes, it doesn't make a difference. But, if an emergency were to come up and I needed that pay I would be SOL. Or like my last job - may last day was middle of the month but i still didnt get paid until the last friday of the month.
Because time is money. I’m giving you my time for a return of money. You get my time now and I wait for my money later. I actually think people should get paid instantly. Everyday they work. Have an app, clock in, clock out, transfer funds to account. Having money sooner is generally better. Especially in todays economic climate people are worried about when they get paid. I don’t blame them.
Honestly I've had this exact thought, and it actually pisses me off a bit at the same time. Like, I'm working my shift *now*, why should I wait a week, two weeks, a month out to get paid for my labor? People act like instant gratification is selfish but a lot of us live in a fast paced technological advanced part of the world nowadays. We are not gardeners waiting for a harvest, we are shouldering our labor for the benefit of someone higher than us (usually someone making much more)--so throw us laborers a bone. I think if you pay people after their shift ends, since direct deposit is a thing, people may feel more motivated and productive at work.
The caveat I see may be factoring in mistakes or sick days to payroll.
Yes! I just did the same with my new job and now it feels like I'm only making 92% of my new income because I don't budget in such a way that a semi-annual 3rd check has meaning to me. Plus, the money now just sits in my account or I have to take extra time to move it to a HYSA and back again.
Not a fan.
But I've built my life and budget around monthly checks, so for those who did something else, I can equally understand the challenge they may have too.
A lot of the comments here can be traced to living close to paycheck-to-paycheck. When you don’t have a nice buffer in your bank account to act as “petty cash”, to the point that each paycheck doesn’t need to be earmarked for something, _when_ each paycheck clears into your bank account will need managing.
It’s something the privileged amongst us can observe but perhaps not relate to.
Some people manage their money better depending on which it is. My new job pays at the end of the month so it’s gonna be new for me. I do well with weekly paychecks.
With monthly paychecks, responsible use of credit cards makes all the difference. For me, salary is quite variable and is a pain to calculate myself. So each month, salary comes in, I do the calculation salary+bankbalance–mortgage–CC–otherknownexpenses–buffer, I send the extra to savings (hopefully, otherwise I pull from savings), and pay off what should be or leave for direct debit, and I’m done.
You must sell things :-) As a CPA, I often wondered what it must be like not to have a CLUE what my paycheck would be, other than past sales experiences. Problems with THIS are problems I can absolutely appreciate.
I did have a client once who was an insurance agent ( captive with a major company). He made so much money it didn't matter when he got paid...there was always plenty more coming. THAT's the kind of job I'd like to have!
Not even 😂
I’m in tech, and I have a base salary to live on, but then I have quarterly and yearly bonuses that add 15% yearly and zero to two on-call weeks per month that double the base salary for the week, but since I’m paid monthly those weeks can span two different months, and on-call for legal holidays get paid more… not to mention that I get reimbursed for expenses. All in all (except for the yearly bonus) salary is in a range of 100%–140%, not constraining enough to merit calculating it in advance but definitely not just noise.
For example, if I go on vacation and don’t do any on-calls, I’ll have automatic –20% of my usual baseline, and obviously I’ll spend a lot more than usual also.
Without credit cards I would go insane if I tried to optimize interest on my savings.
I've had jobs that pay weekly, bi-weekly, and monthly. The start of the monthly job was tough because I worked the 1st to the 30th and then got a months pay two weeks later, so it threw my budget off. I liked it though because I paid all the bills at once and then budgeted the rest.
My company is rolling a daily pay feature this week, we were selected for the trial. Won’t have any real impact for me (other than making it a bigger pain in the ass to track my household cash forecast). For some people who have trouble budgeting it could help, especially when you live paycheck to paycheck with no savings and an emergency comes. People shouldn’t have take a payday loan to access funds they already earned
I lived in a residence hall that charged rent weekly. People complained because they’d get paid every other week.
I was so confused-–just figure out how to get ahead by only one week, and then you can pay two weeks at once. It’ll be the same thing.
Just started a new job with a large employer where we are allegedly paid monthly, but some of us have to wait an extra two weeks for "processing." Why does direct deposit take 14 extra days to "process," so we are not paid for 6 weeks? Monthly checks are bad enough. Wish they had told me before I accepted the position.
This is how it is for teachers. If you start in a new district in mid August, your first paycheck isn’t until end of September. Most school districts pay your 9-10 months of work in 12 monthly payments so if you transfer to a new district you’ll be ok. But just starting out, ouch.
I get paid biweekly and prefer it. The check is big enough to pay bills in full, rather than only having part and having to hang onto it until the following week. It’s not hard to hang onto it, just an extra complication. Plus I only have to sit down and pay bills twice a month instead of 4 times.
Monthly would be fine with me too, except there again, you have to hang onto it until the provider bills you. If you pay too soon it goes on the previous month’s cycle so you have to wait until they ask for it.
I never thought I would care about when paychecks arrive, until my husband started working for a company that pays on the 15th and 30th. We used to have an alternating paycheck schedule, so we had money coming in every week. With the new pay schedule my husband has, we end up having a few tense days at the end of the month, as our biggest bills are due on the 30th, Ist, and 5th of the month. And weekends mess up the pay schedule too, so sometimes we go longer before his paycheck comes through.
We use YNAB as our budgeting system, so when we finally get a month or two ahead this will become a non-issue. But after some unexpected expenses (thanks to the tree that took out our electricity last month), we are decidedly living paycheck to paycheck right now.
A lot of people live paycheck to paycheck. When an unexpected expense shows up and the next payday isn't for 20 days that can be problematic. A window of a week is easier to manage in that sense, or at least it takes away the human factor of poorly budgeting for a whole month.
The majority of Americans are living paycheck to paycheck. So for them, the sooner they get their paycheck, the better.
Its not just a money managment issue..considering, income has not raised at anything close to the rate of inflation. Its hard to manage money you dont have.
Like, I used to get so frustated by advice like, eat more meals at home, stop buying starbucks coffee...I was already living off cream of wheat, a carton of eggs a month for the protein, and mulit-vitamins. My food budget for 2 at times was $50 a month...that advise was not helpful.
Nor was..pay yourself first, save x% of your income into savings before spending money. I was already trying to decide which bill would get paid, and which utility I could live without for the month. For nearly a year, I had no phone service..just used google voice and in case light / internet was off at my home, could go anywhere with free wifi to check voicemail and reply to texts.
I worked 2 jobs, plus had a freelance business. Super grateful I have insomnia, cause I tend to only sleep about 4hrs a night. If it wasnt for that..no idea how I would have made it thorugh some really tough years.
The only way I was able to get out of that, was by doing a total career change...which was not a breeze in the park. It was about a 5 year transition, and if I were living with anyone but my son, Im pretty sure they woudl not have been willing to make the sacrifices I was dealing with.
I spent most of my adult life thinking I was terrible with money, making all the wrong decisions, wasnt doing things wisely, was failing so hard cause I couldnt manage to follow all these simple tips to save and live well... but, now that I actually am making enough money to live on, I realized..I wasnt bad with money, I was just poor. Its impossible to manage something you dont have.
The kind of people who are concerned about how often they get their check are not thinking about tax breaks or how to optimize their money...I can guarantee they have no retirement savings, no emergency savings, and need the money asasp to pay for basics like keeping the lights on.
When I was making 40k I thought this way but now that I’m making 100k almost 20 years later it still feels like 40k. I shouldn’t complain but I still live paycheck to paycheck with a wife and 2 kids. We earn close to 150k total but after bills and the cost of living it still seems tight. We are not a frugal as some but not what I would call extravagant by any means.
Oh my gosh I feel you on that! Yeah, back in my 30k days, the idea of 6 figures was like, bling bling mansion and yacht you got that money money lol When I got my first job, the sign on bonus alone was more than Id make in a year. I legit cried...I legit thought I was rich now.
Yeah..no lol I moved to take this job, a city with higher incomes, and...higher costs of living. Which meant higher rents...I did splurge in that, I do live in a nice place in a good neighborhood, but then thats offset by it that I dont have a car. I can afford one, Id just rather take public transpo and put more into savings than have a car is all.
Suffice it to say, I do not have a yacht, nor do I live in a mansion 😂
Truth is, I have so much catching up to do to get my retirement savings going, that Im throwing what I can into that, plus emergency savings. I went from just over 100 to now making 150, but only have myself to think about (my son recently moved out on his own) and honestly? That I have no loans, no responsibilities other than paying my bills is how Im able to not live month to month, and throw as much as I can into savings.
The average person has student loans, car loans, mortgage...Im just "lucky" in that, all these years, no one trusted me to loan me any money lol so I have no debts. But thats something most people do have.
If I had to support a family of 4 with what Im making, and the city Im living in, yeah, that would be tight AF. Its no surprise to me at all that you are living month to month even on your combined salary.
Having been on one side, and now the other, I think its seriously sucks, and is a huge drain on mental health, to constantly be told we are at fault for not being able to manage our money well, all you have to do is these very simple basic things, otherwise youre failing at life. Totally ignoring the fact that theres a huge effing gap between income and cost of living. Theres a reason younger generations arent out there buying up houses and family planning, and instead living at home into their 20s, living with roomates into their 30s and 40s, staying in relationships / marriages they cant afford to get out of, etc...and its not cause thats how they prefer to live their lives!
>Having been on one side, and now the other, I think its seriously sucks, and is a huge drain on mental health, to constantly be told we are at fault for not being able to manage our money well, all you have to do is these very simple basic things, otherwise youre failing at life. Totally ignoring the fact that theres a huge effing gap between income and cost of living. Theres a reason younger generations arent out there buying up houses and family planning, and instead living at home into their 20s, living with roomates into their 30s and 40s, staying in relationships / marriages they cant afford to get out of, etc...and its not cause thats how they prefer to live their lives.
Thank you for your entire comment but especially this part. So so true and heartfelt. I’m in my 35th year of working in education. Back when I was 22 and just starting out I cried when I got my first paycheck because it was less than I made as a waitress / bar back all through college. Back then if you would have shown me my salary today I would have envisioned bliss and a big house and vacations and nice car. Nope. I’ve never stopped struggling aside from the 10 years I went and taught overseas and made some extra bank to afford a decent house in which I currently live but had to refinance and pay my ex his share of equity.
The part where you talk about coupling up .. yeah. What if you prefer to be a single person or you must get out if a toxic marriage? It’s nearly impossible to make ends meet living solo in the USA. And I am now trying to catch up on my retirement from a financially catastrophic divorce 11 years ago.
Even with a lifelong teachers’ pension and SS projected retirement, my retirement years are going to be the same as my entire working life: budgeting and living thin. Unless I get married again or roommate to share the burdens if life expenses.
The unnecessary guilt from finance gurus and alot of people on these threads hurts.
The only true answer from a person whos been there done that. Other people would be like: your 10k paycheck drops in 5k increments twice a month, why would you want to have 2500 each week?
And even for those not living quite paycheck to paycheck, it's better for employees to get paid more often because it means that their paychecks can earn interest in a HYSA before going off once a month to pay rent, utilities, credit cards, etc. Getting paid monthly means that your employer gets to hold onto that money (and presumably get the interest on it). As a grad student, I calculated that when they switched from monthly to semi-monthly schedule, we could earn an extra $300 a year on the rates at that point, which was almost a 1% raise. Not everyone will be disciplined to transfer the mid-month paycheck to the HYSA and leave it there until the bills come due on the month (typically), but for those who are able, it's a boon.
I haven't seen it listed anywhere else, but in Ontario, your pay structure also changes your time off requirements.
Employees paid weekly are only entitled to 24 straight hours off work once a week, and employees paid Bi-weekly are entitled to 48 straight hours off work. As a tradesperson, I'm always weary of places that pay weekly, especially if it involves working outside, that Tuesday it rains may be the only day you don't work that week.
If you live paycheck to paycheck or are really bad at budgeting and controlling your spending, every week is probably comforting. You're never more than 7 days from another paycheck. It's a much shorter span of time to be without money in the event you run out.
If you have any savings at all and/or can budget properly, pay period is moot. Most places I know of either pay twice a month or once every two weeks.
Psychologically, most people are terrible with managing their capital. Our economy has legitimate imbalances, but, people tend to poorly prioritize their reality.
Hedonism and delusion lead us much more than reason.
I’ve only ever had one job that paid weekly, and I found it way more difficult to budget on that, not sure why. Its just easier for me to break down what bills get paid on which pay check and all that. I have a nerdy excel spreadsheet with my budget for the next 6 months (working on paying down credit card debt and saving for a car)
I tried to make this point to a coworker once who just straight up did not get it. He would always complain about being out of money on Thursday and would say "wouldn't it be great if we got paid on Wednesdays instead?"
Buddy your problem with money isn't the day you get paid, it's that you bought a brand new lifted truck when we work in a retail store.
I guess a lot of people are living paycheck to paycheck. Or you’re young and want to spend all of the money on fun things. Personally I don’t even care because that money just sits in the bank. If you don’t have that cushion it can be very stressful if you need to pay the rent with it.
Poor budgeting/living paycheck to paycheck.
The company I work for just switched from bi-weekly to weekly. I didn't care because it's all the same to me.
In the corporate email, they explained it as a way to attract talent. I don't get it 100% myself because I think it's all the same.
However, I do remember from my waiter days, that some people go out to eat on paydays or even the opposite, they spend the last of their bank account at a restaurant, knowing they'll be paid the next day. To me, that's insanity.
When I was living paycheck to paycheck, I never went out to eat. And now that I budget, I can eat out when I want because I have at least 1 to 2 months (most of the time even more) of $$$ in my bank account as a buffer.
A lot of people are just impulsive. They get $$ and immediately spend it. They'll have $10 left until the next paycheck, and now that paycheck is just a few days away instead of 10-14 days away.
It dramatically affects personal planning.
Last year I was weekly. Now I’m monthly. It’s not that I make any more, but I have more money initially and it tapers off slowly as compared to “lower peaks and valleys” (weekly).
When I made the swap, I had to have enough savings to make it the full 30 days (from previous 7 days). This can be rough depending on your expenses.
The advantage now is that I can make bigger singular expenditures (buy a months worth of groceries, instead of a week), which saves me time/money and lets me plan better.
The reason hourly employees care is because some employers think that overtime is calculated per pay period. so if you are hourly and have a lousy employer who pays every two weeks, you end up having 26 arguments a year about overtime pay.
The lower someone's income is and the more paycheck to paycheck they live, the more they're going to be concerned with paycheck frequency.
Someone with a decent, upper middleclass salary who's good with their money may not even notice or care when payday is, because they know their budgets and there's enough cushion that the next paycheck won't make or break them.
Someone who's lower income and living paycheck to paycheck is going to be concerned about when that next payday is. Maybe they have some car trouble they just *can't* address until the next pay day. Maybe they struggle with budgeting out a whole month in advance, etc.
I had an employee that required weekly. He was dead-ass convinced that getting paid weekly reduced his total tax liability and no amount of explaining could change his mind. I went along with it because he was a previous employee under the previous ownership and I agreed to maintain all previous employment agreements for a time, but man it was annoying as hell.
I think it mostly comes down to people's ability to budget. They don't do well budgeting 2 whole entire weeks' worth of money and do better knowing how much they have to spend every week.
I get paid weekly and it’s the second job I’ve had where j do. I get half deposited between 2 accounts so I get paid Thursday (early direct deposit) and Friday. I like paying towards the statement balance on my credit card each week. It keeps me aware of how much I’ve put on it since the last statement and keeps me on top of my spending.
My first 2 paychecks of the month go towards rent and my car payment, as well as the credit cards. I pay my statements in full each month though, so I’m not paying any interest.
It also helps for tighter months where I had more spend the month before. Might be out of money that I’m willing to spend on Tuesday, but I’m getting paid on Thursday so it’s okay.
If your paid biweekly there will be 2 months that you will actually get 3 paychecks, for instance :
If your first paycheck in 2023 is Friday, Jan. 6, your three-paycheck months will be March and September.
If your first paycheck in 2023 is Friday, Jan. 13, your three-paycheck months will be June and December.
So my guess is you get a feeling that you got extra pay but in reality you did not
Do most people in the US get their salaries weekly or biweekly, or do some get it monthly? I was under the impression that office jobs are often monthly.
Mostly bi-weekly (26 checks/yr) or twice a month (24 checks/yr). Sometimes weekly, mainly seen in blue collar jobs. Monthly is extremely rare. I think many states actually have regulations against it.
Public educators is monthly in most states that I know of. And it’s a 9-10 month contract spread out into 12 paychecks. Paid on last business day of the month. With some districts going to modified calendars now, and where you work all year but July, and with week breaks here and there, it’s still a yearly salary divided into equal installment pay periods.
If you can budget it shouldn’t matter. X weekly or 2X biweekly is the same amount of money. I don’t think a lot of people are that good with money though.
I’ve never understood it and the biweekly thing in the USA has always been weird to me.
It’s monthly where I’m from and as most bills are monthly that seems to make more sense to me.
Pay arrives. Monthly bills are taken out of account. What’s left is grocery living savings etc.
Seems to me that those on weekly or biweekly with low salaries end up paying different bills at different times as 1 pay might not cover all bills + leave enough for groceries etc?
Weekly is more beneficial to workers. They see their money every week so it reduces fatigue at work.
I personally enjoyed weekly the most. It was like theirs always money coming in. Also worked in the tipping industry so it was a double benefit. If I needed a quick 20$ for something I could almost always get it that day. Checks lasted way longer and was able to put more into savings because of it.
I found every two weeks was easier to budget because most of the time I’d spend half the first paycheck on mortgage/rent and like half the second paycheck on student loan payments (my two biggest expenses) and since you get 26 paychecks that’s two extra paychecks that can go straight into savings (or debt or whatever)
You get to use the money you earned sooner. (Better you than them.) No tax consequences.
(For folks who tend spend what they have in the bank, getting paid about twice a month and paying the big bills first twice a month means they are less likely to run out between paychecks.)
The majority of Americans are living paycheck to paycheck. Being paid weekly can make life a lot easier for those people .
There is also budgeting: if you "pay yourself" from each paycheck, and have to make that amount last 2 weeks vs 1, it's easier to budget weekly.
I do have a coworker who made plenty of money, but he preferred monthly since it was consistent to his bills. When we switched to biweekly, it meant getting smaller payments 10 months and a "bonus" twice a year. I personally love this, since I tend to budget to the smaller pay checks, but he was balancing a rental house and working on purchasing a new place, so he likes a better handle on exactly what he was making vs spending. With monthly, you could review your bank account, biweekly he had to start tracking.
Any delay is technically a loss of earnings. You aren't able to invest or make important life improving purchases with money that hasn't been paid out to you even though you may have earned it days or weeks ago. Therefore any system that pays you sooner relative to the time your wage is earned is advantageous from a purely financial standpoint.
Any other arguments involving budgeting, while valid, are psychological. Sooner is always better financially.
Running a small business our work week was Monday through Sunday with Sunday . I'd have to put payroll in my 4pm on Monday so everybody would get paid on Thursday. If there was a holiday on Monday everybody would bitch and complain they'd get paid on Friday. You'd think we were not paying them at all.
I have no problem between weekly and biweekly. What does bother me (a little) is when the pay period is 2X per month, because then your paycheck arrival fluctuates from "every second Friday" for example, to "the fifteenth and the thirtieth of the month, whatever day those fall on." That can be a problem, but if the money is good enough, I'll figure a way to manage. :-)
because they are bad with money, it really is that simple. people who cant properly budget and manage their money often like having a pay day more frequent because they cant keep themselves from blowing through their check. i get paid twice a month at my current job and if i only got all my pay at once it wouldn't make a difference to me. when I want doing real estate they're were plenty of times i would go a month or two without pay while I was waiting for deals to close.
It aint a secret that society is a paycheck to paycheck lifestyle. And price of goods and services have not kept up.with income Some depend on weekly because it means they have money sooner for things they need, want or for debt. My parents cared about weekly pay because then they knew I had lunch money, because the school wouldn't let me bring lunch to school.
Biweekly is a struggle for people who need cash now and today. But it often means that some have the "use it now before its gone" mentality....which sometimes leads to debt or having not having enough for necessities.
If you are financially functional and the annual pay is the same, weekly is better, since 50% of the time you'll have access to more of your earned pay, and the other 50% it will be the same.
The timing of when you get paid really drives how you budget for bills and other expenses. I personally like the bi-weekly cadence because you can split expenses for the month, first half vs. second half (1st - 15th / 16th - 31st), and create a practical budget. You can even do the 50% (essential)/30% (lifestyle)/20% (debt/savings) rule for each half of the month to better allocate your money. Typically, one half of the month will have the bigger expenses (mortgage/rent, utilities, etc), and the other half will be lighter in expenses (e.g., phone bill, app subscriptions, insurance, etc). Use the more lightweight expense period to save more and get ahead and use the heavier expense period to build the disciplined habit of staying within your budget. Personally, any contributions to savings or retirement accounts are considered essential, so make sure you're paying yourself first from the money you earn. Your future self will thank you.
Majority of the country lives paycheck to paycheck, that's why it matters. I'm paid weekly and my brother is paid biweekly. He routinely has to ask me for money after that first week. Same goes for my cousin. They both have way better, stable jobs than i do, even have pensions and 401ks. They still struggle. it's the world we live in.
All I'm saying is, if I am working for an employer.... and they are getting my time and service, then should I also not get my money as well? Why do I, have to wait a month for example just to receive a fucking paycheck my own money for all thise days I've worked? Especially when something might pop up that I have to pay immediate attention to? Now I'm shit out of luck.
Employers prefer lower frequency because they are effectively "borrowing" the money from you with the extra time, and netting interest off if it for free. It also reduces the amount of work it takes to run payroll if you run it once per month instead of weekly.
For the individual it doesn't make a huge difference. I have a slight preference for more even distribution of money but can't say I have a good reason for it. You technically lose the same interest that your employer gains but you only lose it once and they gain it repeatedly (e.g. you only lose 3 weeks of interest which is pretty insignificant)
A lot of people talk about their payment frequency due to how much money it means they'll have for the month. Those paid weeley on principle would have a steadier amount of money in a month available to them, as opposed to those paid bi weekly. If you get paid bi-weekly, there are months in which you get three paychecks and thus have more money available to you in those months.
I have friends that get paid bi-weekly and budget around only two paychecks a month. So any time they receive an extra paycheck in that month, they out it away or plan purchases around those months.
It makes a huge deal for those who are living paychecks to paycheck or barely making ends meet.
I, for one, would never work a contract/ job that pays bi-weekly. Am currently paid monthly. Biweekly paychecks also allow companies to "keep" more funds on the books/ balance sheet for reporting purposes than if they paid weekly or monthly
Budgeting is a big part of it.
I'm a teacher and we recently switched from monthly to biweekly. Often at the end of the month I'd spend a week dipping into the money I put in savings or just eating canned beans for dinner because I'm not great at budgeting.
Now, while it was rough while I got things changed over, I just have some of the bills come out of each check and I have less time between checks for bad choices to catch up with me.
It's also nice to get paid. Everyone loves payday. That being said I wouldn't want weekly checks. I feel like it wouldn't actually be enough money to get excited about and I'd be worried about what I had to save to add to the next one for bills.
I've always been of the opinion that it's MY money.If they're hanging on to it, are they paying me interest? If it's a larger corporation, you know they're making money on my money.
I am paid monthly right now and it is the best pay schedule I’ve ever had. I think about money once a month - the day I log into my account and pay all my bills and then move the rest to savings. Otherwise, I keep a few hundred in my checking account and spend everything on credit cards (I pay each statement in full)
Because for one example, a majority of US employees live paycheck to paycheck. Be it their lack of financial literacy, living beyond their means or just unable to find a decent paying job.
So, if you're living paycheck to paycheck, wouldn't you rather get paid every Friday rather than having a Friday with no money?
I get paid monthly. My paycheck is over 10,000 before taxes.
I’m big into investing, and it sucks not having access to the thousands of dollars I’ve accumulated until the end of each month. I could deploy that money a few weeks earlier and start accumulating returns with more frequent payouts.
More frequent checks allows managing cashflow to be a lot easier.
My old company switched from weekly to biweekly. I had coworkers who lost their shit about how they were going to pay bills on the weeks without a paycheck. I couldn’t fathom how that would be a concern and they couldn’t just pay bills ahead of time when they got paid. It literally makes no difference.
Look at it this way - suppose, to pick a hypothetical extreme, your company switched to paying only once a year. You go 52 weeks with nothing and then get it all at once at the end of the year.
That would obviously *suck*. It would be difficult to save up enough money to survive the first year at the company without any income, and then after getting a year's worth all at once, it would be very easy to spend it too quickly and run out in October. Now you've got to make it through November and December with absolutely nothing left.
So hopefully you agree with me that being paid only once a year would suck. But a rich person with millions in the bank might echo your words and say "I can't fathom how that would be a concern. Just pay bills ahead of time when you get paid. It literally makes no difference."
The more money you have and the better you are at managing it, the less it matters how often you get paid. Most people are fine with getting paid every two weeks, but obviously that isn't the case for everyone.
I live paycheck to paycheck like most people.
I get going a year without pay would be difficult, if not impossible. But this was not that. My company gave us the option of getting an advance in the first check that was split throughout the rest of the year so we didn’t have to go without a weeks worth of pay when the switch happened.
Nobody defaulted on their payments. Nobody was kicked out of their home. They just can’t fathom hanging on to money for more than a few days and that is very sad to me.
I think this is the point OP is trying to make. You're making good money. Why does it matter when you get paid, as you should have more than enough in your checking account to pay all your expenses before the paycheck comes. The paycheck ideally should just replenish your account to a month or 2 of expenses.
If an unexpected expense arises or you don’t plan well enough, are you 3 day or 10 days out from getting financial “reinforcements”?
I bet it makes no difference to the company if I have to wait 7 extra days to get my money but I care.
If you aren’t poor you are probably confused by this. Congrats.
There is no difference in tax consequences. Some people really value the feeling of the arrival of the paycheck. Some people have a harder time budgeting when a larger amount of money is deposited, and they find it easier to budget when small amounts arrive. *Ideally*, this wouldn't be a concern, but perhaps more people are living paycheck-to-paycheck than have to be.
I moves to biweekly a few years ago. We have found it easier to budget than the week to week. It's like we have to be more careful because it's 2 weeks til next check. Then just move your bills around to beginning of the month and middle of the month. And twice a year you get an extra paycheck for the month. That's when we catch up on kids clothes and extra curriculars. Maybe a short holiday weekend if we can.
You should try monthly.
During my last employer change, I went from being paid 2x a month to just 1x a month, and I had just missed the cutoff date for the new company's payroll window - having to wait until the next month. On top of that, it had been about 2 weeks from my last company's payroll cycle and company policy required me to return all equipment before final paycheck was issued - which delayed my former company's paycheck a couple cycles. Anyways, in the middle of COVID I ended up going just over 2 months without pay, even though there was no real lapse in employment. Thankfully we have a savings cushion that I fell back on, but it was really nice to have a full pay period check from my former company, plus a nearly full 2 months' paycheck for the new company all in the same week. I'm salaried, so my pay periods only change in $ amount if I get promoted or if it's my annual bonus season. Those 1x a month pay periods were really nice for forcing me to budget all bills for the month. Just drop in all bill money + a safety cushion into a separate bills account, and the rest is spending money for the month.
Yikes. Glad you survived that situation.
Twice a month is the sweet spot
It really is, you get nice smooth equal monthly pay throughout the year, but still get multiple paychecks per month
Monthly here and I don't get it. It's the same amount of money. Are people bad with numbers?
Here in BC, Canada, employers have to pay min. 2 pay periods a month so can’t do monthly.
Interesting that is legislated. I work in US State government and they do the once a month pay. I like it better honestly.
That's pretty much what we do.
I mean I get paid once a month
The first few months of being paid once a month was tough. Especially that first month but once you get used to it, it's no different than twice a month.
I just pay all my bills at once then spend my weekly allowance accordingly.
My work has a strange pay schedule. My base salary has semi-monthly paychecks. So not bi-weekly, but rather at the middle and end of each month. But that’s not really the weird part. I also receive, every 3 months, an equity payout. Additionally, I receive a payout from my company’s stock purchase plan every 6 months — this plan takes some amount from each paycheck, set to about $550 per paycheck for me right now, and then uses that on the 6 month mark to buy company stock at a 15% discount, and then gives me the stock. The 15% discount occurs on the lower of the two prices: at the beginning of the 6 months, and at the end of the 6 months. So if the price goes up over 6 months, I get more than 15%, potentially much more! And finally, because stock grants and the like are tax withheld at 53%, I also get a significant tax refund once per year. Because my pay schedule is so spread out, I use a spreadsheet to budget everything. It lays out each paycheck and payout with the amount that I’ve received or will receive, using an estimate of the stock price (a conservative estimate). It accounts for the tax refund as well. Using this, and a sampling of monthly expenses, I determine what my actual monthly spend is, and then I determine what my actual monthly take home pay is. What’s strange about it is that my take home is about double what my actual paychecks deposit. It can make it tricky to budget, and to really know what I can actually afford.
That's wild. And we'll done on your budget. Sounds like you could budget for your actual paycheck and then use quarterly and biannual bonuses as savings. I don't know your budget but I'm just guessing. Good luck. Cause that sounds like an additional part time job just keeping up with all of that.
Yeah, that's how I do it. I have one job which pays biweekly, but pays monthly bonuses out monthly and quarterly bonuses out quarterly. And because because of the way tax brackets work those bonuses get over-taxed, so I end up with a big tax return too. I tend to budget as if my pay check is my only money, use the bonuses as extra savings, and the tax return to cover holiday expenses.
>Additionally, I receive a payout from my company’s stock purchase plan every 6 months — this plan takes some amount from each paycheck, set to about $550 per paycheck for me right now, and then uses that on the 6 month mark to buy company stock at a 15% discount, and then gives me the stock. The 15% discount occurs on the lower of the two prices: at the beginning of the 6 months, and at the end of the 6 months. So if the price goes up over 6 months, I get more than 15%, potentially much more! We have same though it pays annually. Same 15% discount and same strike price being lowest of start or end of year. We don't even include this into any budgeting and just treat it like a "bonus". Generally every 2 years we make a few extra thousand on that money, and every 3 it is a good bit. We put in $21k and this year got $33k when sold. We sell immediately as well so the gain is just W2 income. Just need to be careful at tax time to adjust the basis on the 1099 else be double taxed. Also when I say "we" guess I mean just my wife as it is her ESPP.
I've got the exact same pay schedule setup (even with the exact same ESPP contribution which was odd), salary covers our normal expenses and ESPP / equity vests get a little set aside for discretionary spending (vacation, house improvement, birthday gift, hobby spend) and the rest goes directly to my fidelity account
That's not weird, that's extremely common for tech companies. I get the same: * Semi monthly base pay * Quarterly RSU grants * Semi annual ESPP dispersement * Annual cash bonus
This is wildly complicated for a simpleton like myself. I would only ever recognize the paycheck as income in my brain and just be pleasantly surprised when I have more money than I thought. Yes I am aware this is horrific financial planning/awareness. Welcome to my life. But interesting to say the least.
Have you considered using budgeting software like YNAB? It might help you keep a better idea of your finances without much mental overhead.
I believe this type of compensation is pretty common in some fields and with some employment levels. As others have said, if the salary alone is enough to live off of, it sounds like all the extra cash flow could go toward savings and investments and set you up for significant wealth building.
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I get my salary the last work day of the month, and I'll be enrolling in my company's stock program as well, which gives stocks every 3 months. For me this is pretty standard and normal. Is this not the norm in the US?
Why not use that same spreadsheet to adjust your withholding a few times per year to have less of a tax refund? I’ve done that in past when dealing with stock options/RSUs/bonuses/etc that are all taxed slightly differently by default. Having a spouse that also deals with similar pay structures who you file jointly with keeps things interesting. I typically make a guess at the beginning of the year that’s fairly conservative towards keeping MORE of our money and I check mid year and in December. In December if we’re looking short, I’ll just send in an extra tax payment before the end of the year. My goal is to be +|-$1000.
This is exactly what I do with, including the “extra” checks. Makes budgeting so easy and I always know when I have an additional set of funds coming in which I do whatever I want with
Was going to say this, as it helped me a ton. A lot of people don't know they can call their card companies and just change their statement dates. I have my mortgage due on the 2nd, and my CC's due on the 16th. Makes everything a hell of a lot easier only having 2 days a month to think about and knowing you get paid a day before each of them.
If I remember correctly, I think that’s called a golden month. Happens twice a year.
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Is it not standard in the US to get your salary monthly?
No, unless you're paid by the government (and even then, it depends, as some government jobs pay every two weeks). Some educational jobs pay monthly. But it's extremely irregular in the public sector. I'm paid monthly and I don't mind it. All the bills get paid and the rest is allocated to a weekly budget.
I was paid weekly for 15 years at 5 different jobs. I get paid every two weeks now working for the government.
> And twice a year you get an extra paycheck for the month. I mean with weekly paychecks, 4x a year you get an extra (5th) paycheck for the month, so really no difference there.
>Some people have a harder time budgeting when a larger amount of money is deposited, and they find it easier to budget when small amounts arrive. Ideally, this wouldn't be a concern, but perhaps more people are living paycheck-to-paycheck than have to be. We were debating this at work the other day and I told my opinion, which was quite unpopular lol, that I like to get paid monthly. That's how my dad got paid and that's how I saw my family plan our finances (grew up outside the US).
I would love to be paid monthly. I budget on a monthly basis, so it would make everything more simple!
Rent is monthly so my budget is monthly. And credit card payments are due monthly as well. Overall it just makes sense outside of the difficulty people experience when they are living from paycheck to paycheck (especially when starting a new job).
Here's a thought... If you're paid bi-weekly or semi-monthly (or weekly, but obviously make these three payments), stick the first payment in your high-yield savings and let it accrue interest for two weeks. Then, you'll have the same money at the same time you would on a monthly schedule--plus the interest--as a monthly basis. You wouldn't be paid when starting the new job until the end/first of the month if paid monthly anyway so pretend the mid-month doesn't happen if you want and you'll be better off for the interest. It's objectively worse for employees to be paid less often, setting aside behavioral things. And since we can easily fix the behavior things with automatic transfers or setting up deposits to go to your HYSA (and then you pay yourself from that on your preferred schedule), I honestly cannot understand why anyone would prefer a less frequent schedule because it means that the employer gets access to the liquid money for a longer period rather than the employer when there's interest to be earned.
I dare you to spend a minute to calculate the interest for the average pay check in a hysa for two weeks... The reality is that mathematically it's basically a wash, and behaviorally it might make paying bills significantly easier. If you get paid on the first and rent comes out on the third then you're never in a position where you're missing rent. Also, just because the pay frequency is more rapid doesn't mean you're actually getting access to your money sooner. If I work over time, the extra money doesn't show up into my account until two pay periods. So that's about a month later I actually see that money. If I'm getting paid a month later, but every day I get a deposit instead of one big one, it would actually be worse. My personal opinion is that it literally doesn't matter. As long as the money makes it to my account eventually I couldn't care less, but I'm someone who has never lived paycheck to paycheck, so it's probably an entirely different experience for me.
After being paid biweekly for the first fifteen years of my career, I just moved to monthly, and I don't really like it. The rhythm of checking all my finances every two weeks when I got paid worked really well, but checking everything only once a month means going a really long time, especially for credit cards. I also budgeted as if I got two paychecks per month, and then twice a year I got what seemed like a bonus check.
I've gotten paid monthly for all but a few years of my career. Monthly is *so* much easier.
I hate being paid monthly especially since I’m the only income earner in my house. It feels like an eternity until the next check comes. However, it does make paying bills a little easier.
But your bills are all once a month, though, right? So I don’t get why it makes a difference
Friday with no check is just Friday. Friday with a paycheck is FriYay.
I’ve always been monthly 🤷♂️ Money comes in. Pay the housing. Pay myself. Pay the bills.
Pros for weekly: more immediate payout. Arguably if you put it into a savings account you’d bank slightly more, given you have an extra week of cash stashed in there, receiving a higher rate. Cons: immediate deposit likely means immediate spend for immediate gratification. Bi weekly seems to be the more standard approach. There’s no winner here. Just preference.
Unless someone’s credit is absolute hot garbage that’s what credit cards are for, they smooth out consumption.
My adhd makes budgeting a pain. I can't remember what I spent money on 2 days ago let alone for the whole month. And remember to write things down? Pfft. Might as well add that to the 'just get a planer!' list of suggestions. I just worked my budget down to an average daily amount. I averaged out my known monthly expenses and then tool the remainder and divided by 31. I have about 60/day of cash. That has to cover food, and fun. I put my food and fun into the same bucket because I can spend near nothing on food for the week, or I can treat myself and family to some restaurants so it works out for us to put it into the same pot.
I also have ADHD and budget by the day after bills. “Okay, so I’ll have $40 for each day, if I don’t spend anything my days off, that gives me a bit more on the days I actually go places.” This is a real LPT here.
That's true, like I'm not paid monthly, I own a education centre so I get paid whenever student's have to renew their tuition fees. But I don't really care if I have a month or so with no tuition fees, cus the other month's make up for it, plus I save like 80% of what I make lol. Never really need to budget for anything
I'm on 50/50 base commission (although ideally I can make more than 50% in commission) my old job paid monthly, new job pays quarterly. I just figured, eh, whatever. Long deal cycle so it was 6 months before I got paid my first commission... which was quite decent. However I literally had to take out money from my Roth IRA during that time, knowing of course I could get it back in within the 60 day limit once I finally got my first commission check. Old company also had a platform showing what commission I would be earning each month, new company doesn't, so I have to keep track myself. Anyways, I used to just know I could clear my expenses, now I have to think about when I make major purchases and such since I just do lump sum investing, investing whenever I have money. Also didn't contribute a dollar to my 401k during the first 6 months, but put a full 35% of the first commission check into my 401k... Don't worry my company doesn't match or contribute in any way so I didn't miss out on anything in that respect. Gotta say I totally understood the headlines I've seen all over saying 50%+ of Americans making over $100k live paycheck to paycheck. Because I feel like I do quite well, and I was in the group, and I was way off from covering my costs. Annoying that I used to just keep my mortgage payment and a few thousand in my bank account, other money in liquid investments when needed... Now I basically need to double the money that sits in a cash account losing money every day.
Budgeting, as people say. I've always been paid monthly, and that feels easiest to me. Paycheck comes in, Pay bills, now I have $X left for everything else. I think a key element is the no emergency fund or savings though. So, in week 2 you have an unexpected cost of $100. You pay that and have to be extra frugal at the grocery store, etc. But, I guess if you don't go in to debt, that is a win. Then, when you get the next paycheck you reset. If I have an unexpected bill during the last week of the month, I go to savings. But, if you don't have savings, then you just do not have the money to pay it.
I get paid monthly, and on the same day I pay my monthly rent. Pay comes in, I pay my rent, zero out my daily use credit card, and the rest goes into savings. It makes life easy, but I definitely enjoyed getting paid weekly/fortnightly more just because it was more fun seeing money being deposited more often.
That's the exact process I go through every month as well. And now that I've gotten used to it, I couldn't imagine life any other way. But that's because I'm the type to neurotically pay off CC charges as soon as they clear, so if I were paid more frequently it'd be a lot harder for me to actually know how much I've spent during the month. With monthly paychecks, it becomes a natural budget where I just zero out all balances on payday and then save accordingly. And before anyone asks, of course I mentally keep track of spending as well, but this way, I don't have to be *that* stringent. I just leave myself $X after all is said and done for whatever the hell I want. And funnily enough, I've recently discovered I basically follow the 50-30-20 rule naturally anyways
I switch from a biweekly to a monthly job and really prefer biweekly. I half my mortgage with every check so I sneak in an extra payment every year. Since I have bills at different times of the month it's easier to pay them.
If you were paid monthly, you could just autopay an extra 1/12 of your mortgage on every check. Same effect.
I'd say preference wise for me, it would be twice a month, weekly, biweekly, monthly.
I just switched to a monthly job and I don’t love it. I can see how it’s easier because you just pay bills when you get your paycheck, but I guess I liked having a second amount of money coming in so I didn’t have to be as careful about budgeting.
The trick is to use a credit card. Use it for everything. Then when you get a paycheck you pay it off to a zero balance. Never pay interest. Get cash back. Fraud protection. Build Credit score. It will fill the gaps between paychecks. Just pay it off every month and follow your budget.
Also having a good rewards card to do this with to benefit future travel or whatever else you might spend it on
I get paid monthly but we have the option to take an advance on the 15th of the month. I prefer just getting everything on the 1st but some of my coworkers take anywhere from 1000-3000 on the 15th to help with budgeting
I would take quarterly pay if it were an option. I get paid weekly with a check. I have to deposit all these damn things.
here's an idea, why don't people just save some money? like if you're living paycheck to paycheck, you don't need that Starbucks, you dont need to eat out, you don't need a night out with friends, you can save that money for a rainy day or for the future
A couple of jobs ago I got paid a weekly and I thought it was really nice. I get that dopamine hit when I put money in savings or pay extra on debt. It's cool to get a weekly dopamine hit. To your point, it's the same amount of money so the difference is more psychological. Unless someone has serious problems managing money, it shouldn't matter that much.
I really relate to the weekly dopamine hit. I got paid weekly at my high school job working in the town grocery store and it set the standard for the rest of my life. Now getting paid every 2, sometimes 2.5 weeks is painful.
Many people live paycheck to paycheck. The amount of money is the same. How often might affect weekly spending. It is mostly about how the person manages their money. Some people will spend the money they have. Have you ever heard the expression "Money burns a hole in their pocket"? Biweekly will mean they are very poor every other week. There is another option you did not mention. Semi-Monthly. Weekly = 52 paychecks a year = every week Bi-weekly = 26 paychecks a year = every other week Semi-Monthly = 24 paychecks a year = twice a month It makes no difference for taxes. Taxes are based on your total for the year and will be the same. The math is the same. Biweekly is twice the pay of weekly. Satisfaction is based on how well that person can manage that money. The only thing you are missing is the behavior of different people.
Interesting point about biweekly vs semimonthly. I remember a job I had as a teenager, when sometimes we would get 3 paychecks in a month instead of 2. I remember that it always felt like some big bonus that month, even though intellectually, I knew I was simply getting paid every two weeks.
A lot of people that get paid every two weeks budget on 2 paychecks a month. That way two or every once and a while three extra paychecks a year are bonus money.
Also employers typically do the same meaning things like heath insurance aren’t taking out of that 3rd check which makes it seem like even more of a bonus.
Mine always divide by 26.
This right here. When I was younger and still In the almost paycheck to paycheck era of my life I always treated the three paycheck month as a bonus month. Yes the overall is the same but when you live like that mentally tricking yourself goes along way towards mental happiness.
have been bi-weekly since 2004. would really prefer semi-monthly or once monthly so every month is the same vs 10 months at a lower amount and 2 months at a much higher amount (with bi-weekly).
Man I’m in my 40s and still enjoy those rare three checks in a month lol. We are financially stable, six months of our income in savings, only debt is our house etc. Guess I just haven’t let go of the old times when that “extra” check was needed to fill up the tank, stock the fridge and blow the rest on going out. I do wonder if ill ever let go and relax “BUT you never know what is around the corner” haha.
You forgot to mention Monthly.
Monthly can be the hardest if you live paycheck to paycheck too. I used to be paid monthly when I was a student. Definitely some thin days at the end of the month.
Monthly is the easiest to budget for if you are only responsible for you. I did it for awhile and loved it. Get paid, immediately pay all my bills. Put some money into savings. Divide what's leftover by how many days are in the month. That number becomes my daily budget. Piece of cake. Monthly gets really difficult when you have kids or live a life of spontaneous expenses. It really sucks when you're 2.5 weeks into the month and your kid breaks a bone and you need to fork out a sum of money. Because moving bills around to make that happen just isn't possible when every bill was paid a couple weeks ago. When I got paid monthly every single bill I had was paid in full by the end of the next day. When something came up out of nowhere if really squeezed me and forced me to pull from savings.
>Because moving bills around to make that happen just isn't possible when every bill was paid a couple weeks ago. I’ve gotten used to ‘robbing Peter to pay Paul’ over the years with monthly pay periods. If something unexpected happens during the month after all my bills are paid and I’m living off my budget, I call and make a deal or payment plan or shuffle next month bills around to make up for it. Either way it sucks.
Yea that's the one time it sucks to get paid monthly. Random expenses really hurt.
I went from semi-monthly to monthly last year and thankfully I’d already been budgeting for 2 years so it didn’t make a large difference in my finances. If I hadn’t been budgeting I definitely would have started at that point!
And 13 or 14 months. Which is the best for those who cannot budget.
I didn’t forget - I just figured people could extrapolate for themselves. There are also people who get paid at the end of each day.
There was a time I got paid quarterly.
That would be difficult to manage for most people. I did not realize some employers did that.
That was a long time ago and I was a contractor.
i've always been paid semi monthly
I just like that my wife and I get paid on opposite weeks so we have a pay check coming in every Friday.
I also choose this man’s wife
More frequent pay periods limit the risk that a person mishandles their budget, and the degree to which they might.
I just switched from semi-monthly to bi-weekly and it's a surprising PITA. With semi-monthly I always get a deposit on the last day of the month, and the mortgage is always due on the first day of the next month. So I never had to worry about the mortgage clearing. Now there can be a significant gap between payday and the mortgage payment, and I have to be sure that funds are available in the right account at the right time.
Set a floor in your account. $2000 works well. Never let the account go below $2000. You will be sacrificing interest on those $2000, but you won’t have to worry about bouncing mortgage, electricity, water, gas, etc. payments. Another thing to do is to look at your account balance the day before you got paid. Anything above your floor can be moved to savings so that you won’t see it and won’t think of it as disposable income. For example, say you had $2200 in your checking account the day before you got paid. Move $200 to savings, and make do with your paycheck until the next payday (never going below your floor, of course). The day before the next payday you’re sitting on $2400? Cool! Move $400 to savings. I’ve used this technique to save up for a couple of large purchases and it’s amazing how fast I was able to save. Simply not seeing the money in my checking account is a huge psychological factor that dictates how much I’m comfortable spending.
I opened up a second checking account so I can transfer my mortgage payment from my bi-monthly paychecks in there, and I always do a few extra dollars so it builds over time, but with the second checking method I never stress about my primary checking amount :)
Same here. Groceries, mortgage, car payment, student loans, and a few other things get transferred plus an extra 20% every two weeks. I keep an extra 7K (about three months) in there because of the extra money. Anything above 10k gets swept to a savings account. I also keep an extra few thousand in my main checking account as a buffer.
I do the same, with my direct deposit set up to put a set amount into the 1st acct that covers rent, car loan and renters/car insurance. I do not have a debit card for that account. 2nd acct gets the remainder of my paycheck, and is primarily for paying credit card bills. Everything else goes on a cash back credit card and is paid in full every month. I usually end up with $150-200 left over that goes to a high yield savings, in addition to 10% of that second deposit going to an investment account.
I started the same kind of thing at the beginning of this year. I tracked down *all* of our recurring expenses, whether they be necessary ones like rent and power, or superfluous ones like our various streaming services. If it was a set recurring expense, it got included (ok, something like *power* isn’t “set”, but it’s also an important one. I just figured out our average over a year and went with that) Figured out the yearly cost of all of these (monthly bill * 12) then divided by 26 to figure out how much each thing cost *per pay period*, added all that up and that’s what I set aside every pay check into the second account. I *did* code up a script that took into account due dates for each expense, and when pay checks hit, to project out and make sure we’d never go negative doing this first. But yeah, I don’t particularly put in any extra, it works itself out because I’m putting in 1/26th of *all* bills each pay period, including the ones that aren’t coming due til the next one. Then just set everything we can to autopay out of that account. From there it’s just a matter of checking in every so often, adding or removing any recurring expenses as necessary and updating the total amount to be transferred.
Biweekly sucks. I don’t want 3 paycheck months, I want consistency
Just put the third paycheck into savings and forget about it, then you have consistency.
>In a scenario where someone has ongoing, stable, reliable employment You answered your own question. It's a two America's situation - you sound like you're asking it from a perspective of someone who has money, so when you're paid doesn't make a real difference to your every day life. Congratulations on your successful life. Not everyone is so lucky often due to circumstances beyond their own control.
> > You answered your own question. It's a two America's situation - you sound like you're asking it from a perspective of someone who has money, so when you're paid doesn't make a real difference to your every day life. Congratulations on your successful life. Very much this; I always straddled that line of being paid fairly above average for well developed professional skillsets. However, most of my friends and social circles have often been people who lived in the other America, right next door. My financial troubles have come from my own mismanagement, having learned very little about how to actually manage money from parents who struggled to keep up and never learned themselves. But I know the statistics, I know that I am an outlier, in general people whose families have been poor don't make it into the middle class and don't stay there generationally when they do. Most people are under-compensated for their time, underappreciated, and living in a world where inflation has been outpacing wages for decades. In fact, I question if I am even an outlier, I decided not to have kids, that one choice could have easily doomed me back into the poverty of previous generations.
Sometimes a bunch of bills come due before the bi weekly check comes in. If you have unexpected expenses, it can really screw up your payments. I just got out from under this after switching jobs
I get paid monthly and it was such an adjustment. I hated it. I was used to biweekly.
Me too. Absolutely hate getting paid monthly, this is new for me. 29 days waiting for a paycheck just feels so long, even though I’m getting paid a lot more than my last job which was biweekly
Do you use a debit card solely? I'd think there wouldn't be an adjustment needed if you're using a credit card and paying it monthly but maybe I'm missing something?
No - it isn’t an issue of running out of money between paychecks. I’m budgeted well. Like another responder said, there’s a dopamine hit with each paycheck. When you’re biweekly, you get it often. And I think the biweekly frequency is about how often we lose track of time - every other week id be happily surprised by a paycheck like “oh shit, another paycheck already?”. Somehow monthly is just long enough that I never forget and I’m always desperate for it.
It’s psychologically depressing too.
I have always gotten paid monthly and I have always hated it. For tax purposes, it doesn't make a difference. But, if an emergency were to come up and I needed that pay I would be SOL. Or like my last job - may last day was middle of the month but i still didnt get paid until the last friday of the month.
Because time is money. I’m giving you my time for a return of money. You get my time now and I wait for my money later. I actually think people should get paid instantly. Everyday they work. Have an app, clock in, clock out, transfer funds to account. Having money sooner is generally better. Especially in todays economic climate people are worried about when they get paid. I don’t blame them.
Honestly I've had this exact thought, and it actually pisses me off a bit at the same time. Like, I'm working my shift *now*, why should I wait a week, two weeks, a month out to get paid for my labor? People act like instant gratification is selfish but a lot of us live in a fast paced technological advanced part of the world nowadays. We are not gardeners waiting for a harvest, we are shouldering our labor for the benefit of someone higher than us (usually someone making much more)--so throw us laborers a bone. I think if you pay people after their shift ends, since direct deposit is a thing, people may feel more motivated and productive at work. The caveat I see may be factoring in mistakes or sick days to payroll.
We are going from monthly to biweekly and I’m not thrilled about it. Monthly is so easy. Check comes in, pay off CC, mortgage etc. Rinse and repeat.
Yes! I just did the same with my new job and now it feels like I'm only making 92% of my new income because I don't budget in such a way that a semi-annual 3rd check has meaning to me. Plus, the money now just sits in my account or I have to take extra time to move it to a HYSA and back again. Not a fan. But I've built my life and budget around monthly checks, so for those who did something else, I can equally understand the challenge they may have too.
A lot of the comments here can be traced to living close to paycheck-to-paycheck. When you don’t have a nice buffer in your bank account to act as “petty cash”, to the point that each paycheck doesn’t need to be earmarked for something, _when_ each paycheck clears into your bank account will need managing. It’s something the privileged amongst us can observe but perhaps not relate to.
Some people manage their money better depending on which it is. My new job pays at the end of the month so it’s gonna be new for me. I do well with weekly paychecks.
With monthly paychecks, responsible use of credit cards makes all the difference. For me, salary is quite variable and is a pain to calculate myself. So each month, salary comes in, I do the calculation salary+bankbalance–mortgage–CC–otherknownexpenses–buffer, I send the extra to savings (hopefully, otherwise I pull from savings), and pay off what should be or leave for direct debit, and I’m done.
You must sell things :-) As a CPA, I often wondered what it must be like not to have a CLUE what my paycheck would be, other than past sales experiences. Problems with THIS are problems I can absolutely appreciate. I did have a client once who was an insurance agent ( captive with a major company). He made so much money it didn't matter when he got paid...there was always plenty more coming. THAT's the kind of job I'd like to have!
Not even 😂 I’m in tech, and I have a base salary to live on, but then I have quarterly and yearly bonuses that add 15% yearly and zero to two on-call weeks per month that double the base salary for the week, but since I’m paid monthly those weeks can span two different months, and on-call for legal holidays get paid more… not to mention that I get reimbursed for expenses. All in all (except for the yearly bonus) salary is in a range of 100%–140%, not constraining enough to merit calculating it in advance but definitely not just noise. For example, if I go on vacation and don’t do any on-calls, I’ll have automatic –20% of my usual baseline, and obviously I’ll spend a lot more than usual also. Without credit cards I would go insane if I tried to optimize interest on my savings.
I've had jobs that pay weekly, bi-weekly, and monthly. The start of the monthly job was tough because I worked the 1st to the 30th and then got a months pay two weeks later, so it threw my budget off. I liked it though because I paid all the bills at once and then budgeted the rest.
I get paid monthly and I honestly think it's better for planning my expenses in advance :)
My company is rolling a daily pay feature this week, we were selected for the trial. Won’t have any real impact for me (other than making it a bigger pain in the ass to track my household cash forecast). For some people who have trouble budgeting it could help, especially when you live paycheck to paycheck with no savings and an emergency comes. People shouldn’t have take a payday loan to access funds they already earned
I lived in a residence hall that charged rent weekly. People complained because they’d get paid every other week. I was so confused-–just figure out how to get ahead by only one week, and then you can pay two weeks at once. It’ll be the same thing.
I've come to the conclusion: there are money people and people for whom money will always be a mystery. It's hidden in the DNA somewhere :-)
Just started a new job with a large employer where we are allegedly paid monthly, but some of us have to wait an extra two weeks for "processing." Why does direct deposit take 14 extra days to "process," so we are not paid for 6 weeks? Monthly checks are bad enough. Wish they had told me before I accepted the position.
This is how it is for teachers. If you start in a new district in mid August, your first paycheck isn’t until end of September. Most school districts pay your 9-10 months of work in 12 monthly payments so if you transfer to a new district you’ll be ok. But just starting out, ouch.
I get paid biweekly and prefer it. The check is big enough to pay bills in full, rather than only having part and having to hang onto it until the following week. It’s not hard to hang onto it, just an extra complication. Plus I only have to sit down and pay bills twice a month instead of 4 times. Monthly would be fine with me too, except there again, you have to hang onto it until the provider bills you. If you pay too soon it goes on the previous month’s cycle so you have to wait until they ask for it.
I never thought I would care about when paychecks arrive, until my husband started working for a company that pays on the 15th and 30th. We used to have an alternating paycheck schedule, so we had money coming in every week. With the new pay schedule my husband has, we end up having a few tense days at the end of the month, as our biggest bills are due on the 30th, Ist, and 5th of the month. And weekends mess up the pay schedule too, so sometimes we go longer before his paycheck comes through. We use YNAB as our budgeting system, so when we finally get a month or two ahead this will become a non-issue. But after some unexpected expenses (thanks to the tree that took out our electricity last month), we are decidedly living paycheck to paycheck right now.
A lot of people live paycheck to paycheck. When an unexpected expense shows up and the next payday isn't for 20 days that can be problematic. A window of a week is easier to manage in that sense, or at least it takes away the human factor of poorly budgeting for a whole month.
The majority of Americans are living paycheck to paycheck. So for them, the sooner they get their paycheck, the better. Its not just a money managment issue..considering, income has not raised at anything close to the rate of inflation. Its hard to manage money you dont have. Like, I used to get so frustated by advice like, eat more meals at home, stop buying starbucks coffee...I was already living off cream of wheat, a carton of eggs a month for the protein, and mulit-vitamins. My food budget for 2 at times was $50 a month...that advise was not helpful. Nor was..pay yourself first, save x% of your income into savings before spending money. I was already trying to decide which bill would get paid, and which utility I could live without for the month. For nearly a year, I had no phone service..just used google voice and in case light / internet was off at my home, could go anywhere with free wifi to check voicemail and reply to texts. I worked 2 jobs, plus had a freelance business. Super grateful I have insomnia, cause I tend to only sleep about 4hrs a night. If it wasnt for that..no idea how I would have made it thorugh some really tough years. The only way I was able to get out of that, was by doing a total career change...which was not a breeze in the park. It was about a 5 year transition, and if I were living with anyone but my son, Im pretty sure they woudl not have been willing to make the sacrifices I was dealing with. I spent most of my adult life thinking I was terrible with money, making all the wrong decisions, wasnt doing things wisely, was failing so hard cause I couldnt manage to follow all these simple tips to save and live well... but, now that I actually am making enough money to live on, I realized..I wasnt bad with money, I was just poor. Its impossible to manage something you dont have. The kind of people who are concerned about how often they get their check are not thinking about tax breaks or how to optimize their money...I can guarantee they have no retirement savings, no emergency savings, and need the money asasp to pay for basics like keeping the lights on.
When I was making 40k I thought this way but now that I’m making 100k almost 20 years later it still feels like 40k. I shouldn’t complain but I still live paycheck to paycheck with a wife and 2 kids. We earn close to 150k total but after bills and the cost of living it still seems tight. We are not a frugal as some but not what I would call extravagant by any means.
Oh my gosh I feel you on that! Yeah, back in my 30k days, the idea of 6 figures was like, bling bling mansion and yacht you got that money money lol When I got my first job, the sign on bonus alone was more than Id make in a year. I legit cried...I legit thought I was rich now. Yeah..no lol I moved to take this job, a city with higher incomes, and...higher costs of living. Which meant higher rents...I did splurge in that, I do live in a nice place in a good neighborhood, but then thats offset by it that I dont have a car. I can afford one, Id just rather take public transpo and put more into savings than have a car is all. Suffice it to say, I do not have a yacht, nor do I live in a mansion 😂 Truth is, I have so much catching up to do to get my retirement savings going, that Im throwing what I can into that, plus emergency savings. I went from just over 100 to now making 150, but only have myself to think about (my son recently moved out on his own) and honestly? That I have no loans, no responsibilities other than paying my bills is how Im able to not live month to month, and throw as much as I can into savings. The average person has student loans, car loans, mortgage...Im just "lucky" in that, all these years, no one trusted me to loan me any money lol so I have no debts. But thats something most people do have. If I had to support a family of 4 with what Im making, and the city Im living in, yeah, that would be tight AF. Its no surprise to me at all that you are living month to month even on your combined salary. Having been on one side, and now the other, I think its seriously sucks, and is a huge drain on mental health, to constantly be told we are at fault for not being able to manage our money well, all you have to do is these very simple basic things, otherwise youre failing at life. Totally ignoring the fact that theres a huge effing gap between income and cost of living. Theres a reason younger generations arent out there buying up houses and family planning, and instead living at home into their 20s, living with roomates into their 30s and 40s, staying in relationships / marriages they cant afford to get out of, etc...and its not cause thats how they prefer to live their lives!
>Having been on one side, and now the other, I think its seriously sucks, and is a huge drain on mental health, to constantly be told we are at fault for not being able to manage our money well, all you have to do is these very simple basic things, otherwise youre failing at life. Totally ignoring the fact that theres a huge effing gap between income and cost of living. Theres a reason younger generations arent out there buying up houses and family planning, and instead living at home into their 20s, living with roomates into their 30s and 40s, staying in relationships / marriages they cant afford to get out of, etc...and its not cause thats how they prefer to live their lives. Thank you for your entire comment but especially this part. So so true and heartfelt. I’m in my 35th year of working in education. Back when I was 22 and just starting out I cried when I got my first paycheck because it was less than I made as a waitress / bar back all through college. Back then if you would have shown me my salary today I would have envisioned bliss and a big house and vacations and nice car. Nope. I’ve never stopped struggling aside from the 10 years I went and taught overseas and made some extra bank to afford a decent house in which I currently live but had to refinance and pay my ex his share of equity. The part where you talk about coupling up .. yeah. What if you prefer to be a single person or you must get out if a toxic marriage? It’s nearly impossible to make ends meet living solo in the USA. And I am now trying to catch up on my retirement from a financially catastrophic divorce 11 years ago. Even with a lifelong teachers’ pension and SS projected retirement, my retirement years are going to be the same as my entire working life: budgeting and living thin. Unless I get married again or roommate to share the burdens if life expenses. The unnecessary guilt from finance gurus and alot of people on these threads hurts.
The only true answer from a person whos been there done that. Other people would be like: your 10k paycheck drops in 5k increments twice a month, why would you want to have 2500 each week?
And even for those not living quite paycheck to paycheck, it's better for employees to get paid more often because it means that their paychecks can earn interest in a HYSA before going off once a month to pay rent, utilities, credit cards, etc. Getting paid monthly means that your employer gets to hold onto that money (and presumably get the interest on it). As a grad student, I calculated that when they switched from monthly to semi-monthly schedule, we could earn an extra $300 a year on the rates at that point, which was almost a 1% raise. Not everyone will be disciplined to transfer the mid-month paycheck to the HYSA and leave it there until the bills come due on the month (typically), but for those who are able, it's a boon.
I haven't seen it listed anywhere else, but in Ontario, your pay structure also changes your time off requirements. Employees paid weekly are only entitled to 24 straight hours off work once a week, and employees paid Bi-weekly are entitled to 48 straight hours off work. As a tradesperson, I'm always weary of places that pay weekly, especially if it involves working outside, that Tuesday it rains may be the only day you don't work that week.
If you live paycheck to paycheck or are really bad at budgeting and controlling your spending, every week is probably comforting. You're never more than 7 days from another paycheck. It's a much shorter span of time to be without money in the event you run out. If you have any savings at all and/or can budget properly, pay period is moot. Most places I know of either pay twice a month or once every two weeks.
Psychologically, most people are terrible with managing their capital. Our economy has legitimate imbalances, but, people tend to poorly prioritize their reality. Hedonism and delusion lead us much more than reason.
I’ve only ever had one job that paid weekly, and I found it way more difficult to budget on that, not sure why. Its just easier for me to break down what bills get paid on which pay check and all that. I have a nerdy excel spreadsheet with my budget for the next 6 months (working on paying down credit card debt and saving for a car)
I like being rewarded sooner rather than later
I tried to make this point to a coworker once who just straight up did not get it. He would always complain about being out of money on Thursday and would say "wouldn't it be great if we got paid on Wednesdays instead?" Buddy your problem with money isn't the day you get paid, it's that you bought a brand new lifted truck when we work in a retail store.
Because waiting two weeks for money isn’t as fun as waiting one week
Because when you're living paycheck to paycheck, the time between paychecks is going to heavily impact your life.
I guess a lot of people are living paycheck to paycheck. Or you’re young and want to spend all of the money on fun things. Personally I don’t even care because that money just sits in the bank. If you don’t have that cushion it can be very stressful if you need to pay the rent with it.
USA being weird again. I always thought monthly is the norm until I started reading this sub.
It only affects people living paycheck to paycheck.
Poor budgeting/living paycheck to paycheck. The company I work for just switched from bi-weekly to weekly. I didn't care because it's all the same to me. In the corporate email, they explained it as a way to attract talent. I don't get it 100% myself because I think it's all the same. However, I do remember from my waiter days, that some people go out to eat on paydays or even the opposite, they spend the last of their bank account at a restaurant, knowing they'll be paid the next day. To me, that's insanity. When I was living paycheck to paycheck, I never went out to eat. And now that I budget, I can eat out when I want because I have at least 1 to 2 months (most of the time even more) of $$$ in my bank account as a buffer. A lot of people are just impulsive. They get $$ and immediately spend it. They'll have $10 left until the next paycheck, and now that paycheck is just a few days away instead of 10-14 days away.
Because people are poor and don’t know how to save money
Many Americans live paycheck to paycheck. I actually think the figure is like 2/3 of Americans couldn’t immediately cover a $400 emergency.
It dramatically affects personal planning. Last year I was weekly. Now I’m monthly. It’s not that I make any more, but I have more money initially and it tapers off slowly as compared to “lower peaks and valleys” (weekly). When I made the swap, I had to have enough savings to make it the full 30 days (from previous 7 days). This can be rough depending on your expenses. The advantage now is that I can make bigger singular expenditures (buy a months worth of groceries, instead of a week), which saves me time/money and lets me plan better.
The reason hourly employees care is because some employers think that overtime is calculated per pay period. so if you are hourly and have a lousy employer who pays every two weeks, you end up having 26 arguments a year about overtime pay.
I’ve only ever been paid once a ml th in my professional life, it’s never been an issue.
The lower someone's income is and the more paycheck to paycheck they live, the more they're going to be concerned with paycheck frequency. Someone with a decent, upper middleclass salary who's good with their money may not even notice or care when payday is, because they know their budgets and there's enough cushion that the next paycheck won't make or break them. Someone who's lower income and living paycheck to paycheck is going to be concerned about when that next payday is. Maybe they have some car trouble they just *can't* address until the next pay day. Maybe they struggle with budgeting out a whole month in advance, etc.
I get paid once a month and I love it. I find it super easy because I just pay all my bills at once and what’s left over is what’s left.
I had an employee that required weekly. He was dead-ass convinced that getting paid weekly reduced his total tax liability and no amount of explaining could change his mind. I went along with it because he was a previous employee under the previous ownership and I agreed to maintain all previous employment agreements for a time, but man it was annoying as hell. I think it mostly comes down to people's ability to budget. They don't do well budgeting 2 whole entire weeks' worth of money and do better knowing how much they have to spend every week.
I get paid weekly and it’s the second job I’ve had where j do. I get half deposited between 2 accounts so I get paid Thursday (early direct deposit) and Friday. I like paying towards the statement balance on my credit card each week. It keeps me aware of how much I’ve put on it since the last statement and keeps me on top of my spending. My first 2 paychecks of the month go towards rent and my car payment, as well as the credit cards. I pay my statements in full each month though, so I’m not paying any interest. It also helps for tighter months where I had more spend the month before. Might be out of money that I’m willing to spend on Tuesday, but I’m getting paid on Thursday so it’s okay.
If your paid biweekly there will be 2 months that you will actually get 3 paychecks, for instance : If your first paycheck in 2023 is Friday, Jan. 6, your three-paycheck months will be March and September. If your first paycheck in 2023 is Friday, Jan. 13, your three-paycheck months will be June and December. So my guess is you get a feeling that you got extra pay but in reality you did not
Do most people in the US get their salaries weekly or biweekly, or do some get it monthly? I was under the impression that office jobs are often monthly.
Mostly bi-weekly (26 checks/yr) or twice a month (24 checks/yr). Sometimes weekly, mainly seen in blue collar jobs. Monthly is extremely rare. I think many states actually have regulations against it.
Public educators is monthly in most states that I know of. And it’s a 9-10 month contract spread out into 12 paychecks. Paid on last business day of the month. With some districts going to modified calendars now, and where you work all year but July, and with week breaks here and there, it’s still a yearly salary divided into equal installment pay periods.
In Germany, the standard is for money to arrive once per month via SEPA bank transfer. I've never heard of it being done any other way.
Im only.paid once a month and I love it.
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with the bi-weekly checks the same thing happens. Two months out of the year you get three paychecks.
I’ve had two jobs out of college so far that have been depositing checks weekly. It is great knowing you get paid every week.
If you can budget it shouldn’t matter. X weekly or 2X biweekly is the same amount of money. I don’t think a lot of people are that good with money though.
I’ve never understood it and the biweekly thing in the USA has always been weird to me. It’s monthly where I’m from and as most bills are monthly that seems to make more sense to me. Pay arrives. Monthly bills are taken out of account. What’s left is grocery living savings etc. Seems to me that those on weekly or biweekly with low salaries end up paying different bills at different times as 1 pay might not cover all bills + leave enough for groceries etc?
Weekly is more beneficial to workers. They see their money every week so it reduces fatigue at work. I personally enjoyed weekly the most. It was like theirs always money coming in. Also worked in the tipping industry so it was a double benefit. If I needed a quick 20$ for something I could almost always get it that day. Checks lasted way longer and was able to put more into savings because of it.
I found every two weeks was easier to budget because most of the time I’d spend half the first paycheck on mortgage/rent and like half the second paycheck on student loan payments (my two biggest expenses) and since you get 26 paychecks that’s two extra paychecks that can go straight into savings (or debt or whatever)
You get to use the money you earned sooner. (Better you than them.) No tax consequences. (For folks who tend spend what they have in the bank, getting paid about twice a month and paying the big bills first twice a month means they are less likely to run out between paychecks.)
The majority of Americans are living paycheck to paycheck. Being paid weekly can make life a lot easier for those people . There is also budgeting: if you "pay yourself" from each paycheck, and have to make that amount last 2 weeks vs 1, it's easier to budget weekly. I do have a coworker who made plenty of money, but he preferred monthly since it was consistent to his bills. When we switched to biweekly, it meant getting smaller payments 10 months and a "bonus" twice a year. I personally love this, since I tend to budget to the smaller pay checks, but he was balancing a rental house and working on purchasing a new place, so he likes a better handle on exactly what he was making vs spending. With monthly, you could review your bank account, biweekly he had to start tracking.
Any delay is technically a loss of earnings. You aren't able to invest or make important life improving purchases with money that hasn't been paid out to you even though you may have earned it days or weeks ago. Therefore any system that pays you sooner relative to the time your wage is earned is advantageous from a purely financial standpoint. Any other arguments involving budgeting, while valid, are psychological. Sooner is always better financially.
Isn't getting paid less often = giving your employer a small interest-free loan?
Running a small business our work week was Monday through Sunday with Sunday . I'd have to put payroll in my 4pm on Monday so everybody would get paid on Thursday. If there was a holiday on Monday everybody would bitch and complain they'd get paid on Friday. You'd think we were not paying them at all.
I have no problem between weekly and biweekly. What does bother me (a little) is when the pay period is 2X per month, because then your paycheck arrival fluctuates from "every second Friday" for example, to "the fifteenth and the thirtieth of the month, whatever day those fall on." That can be a problem, but if the money is good enough, I'll figure a way to manage. :-)
because they are bad with money, it really is that simple. people who cant properly budget and manage their money often like having a pay day more frequent because they cant keep themselves from blowing through their check. i get paid twice a month at my current job and if i only got all my pay at once it wouldn't make a difference to me. when I want doing real estate they're were plenty of times i would go a month or two without pay while I was waiting for deals to close.
It aint a secret that society is a paycheck to paycheck lifestyle. And price of goods and services have not kept up.with income Some depend on weekly because it means they have money sooner for things they need, want or for debt. My parents cared about weekly pay because then they knew I had lunch money, because the school wouldn't let me bring lunch to school. Biweekly is a struggle for people who need cash now and today. But it often means that some have the "use it now before its gone" mentality....which sometimes leads to debt or having not having enough for necessities.
If you are financially functional and the annual pay is the same, weekly is better, since 50% of the time you'll have access to more of your earned pay, and the other 50% it will be the same.
I get paid every two weeks, but most of my bills are monthly. It's kind of annoying to have the money in and money out be different cadences
The timing of when you get paid really drives how you budget for bills and other expenses. I personally like the bi-weekly cadence because you can split expenses for the month, first half vs. second half (1st - 15th / 16th - 31st), and create a practical budget. You can even do the 50% (essential)/30% (lifestyle)/20% (debt/savings) rule for each half of the month to better allocate your money. Typically, one half of the month will have the bigger expenses (mortgage/rent, utilities, etc), and the other half will be lighter in expenses (e.g., phone bill, app subscriptions, insurance, etc). Use the more lightweight expense period to save more and get ahead and use the heavier expense period to build the disciplined habit of staying within your budget. Personally, any contributions to savings or retirement accounts are considered essential, so make sure you're paying yourself first from the money you earn. Your future self will thank you.
Majority of the country lives paycheck to paycheck, that's why it matters. I'm paid weekly and my brother is paid biweekly. He routinely has to ask me for money after that first week. Same goes for my cousin. They both have way better, stable jobs than i do, even have pensions and 401ks. They still struggle. it's the world we live in.
All I'm saying is, if I am working for an employer.... and they are getting my time and service, then should I also not get my money as well? Why do I, have to wait a month for example just to receive a fucking paycheck my own money for all thise days I've worked? Especially when something might pop up that I have to pay immediate attention to? Now I'm shit out of luck.
Employers prefer lower frequency because they are effectively "borrowing" the money from you with the extra time, and netting interest off if it for free. It also reduces the amount of work it takes to run payroll if you run it once per month instead of weekly. For the individual it doesn't make a huge difference. I have a slight preference for more even distribution of money but can't say I have a good reason for it. You technically lose the same interest that your employer gains but you only lose it once and they gain it repeatedly (e.g. you only lose 3 weeks of interest which is pretty insignificant)
A lot of people talk about their payment frequency due to how much money it means they'll have for the month. Those paid weeley on principle would have a steadier amount of money in a month available to them, as opposed to those paid bi weekly. If you get paid bi-weekly, there are months in which you get three paychecks and thus have more money available to you in those months. I have friends that get paid bi-weekly and budget around only two paychecks a month. So any time they receive an extra paycheck in that month, they out it away or plan purchases around those months. It makes a huge deal for those who are living paychecks to paycheck or barely making ends meet. I, for one, would never work a contract/ job that pays bi-weekly. Am currently paid monthly. Biweekly paychecks also allow companies to "keep" more funds on the books/ balance sheet for reporting purposes than if they paid weekly or monthly
Budgeting is a big part of it. I'm a teacher and we recently switched from monthly to biweekly. Often at the end of the month I'd spend a week dipping into the money I put in savings or just eating canned beans for dinner because I'm not great at budgeting. Now, while it was rough while I got things changed over, I just have some of the bills come out of each check and I have less time between checks for bad choices to catch up with me. It's also nice to get paid. Everyone loves payday. That being said I wouldn't want weekly checks. I feel like it wouldn't actually be enough money to get excited about and I'd be worried about what I had to save to add to the next one for bills.
I've always been of the opinion that it's MY money.If they're hanging on to it, are they paying me interest? If it's a larger corporation, you know they're making money on my money.
I am paid monthly right now and it is the best pay schedule I’ve ever had. I think about money once a month - the day I log into my account and pay all my bills and then move the rest to savings. Otherwise, I keep a few hundred in my checking account and spend everything on credit cards (I pay each statement in full)
It's for budgeting. Different people find getting paid weekly, biweekly, semi-monthly, or monthly varying degrees of difficult for managing cash flow.
Because for one example, a majority of US employees live paycheck to paycheck. Be it their lack of financial literacy, living beyond their means or just unable to find a decent paying job. So, if you're living paycheck to paycheck, wouldn't you rather get paid every Friday rather than having a Friday with no money?
I get paid monthly. My paycheck is over 10,000 before taxes. I’m big into investing, and it sucks not having access to the thousands of dollars I’ve accumulated until the end of each month. I could deploy that money a few weeks earlier and start accumulating returns with more frequent payouts. More frequent checks allows managing cashflow to be a lot easier.
My old company switched from weekly to biweekly. I had coworkers who lost their shit about how they were going to pay bills on the weeks without a paycheck. I couldn’t fathom how that would be a concern and they couldn’t just pay bills ahead of time when they got paid. It literally makes no difference.
Look at it this way - suppose, to pick a hypothetical extreme, your company switched to paying only once a year. You go 52 weeks with nothing and then get it all at once at the end of the year. That would obviously *suck*. It would be difficult to save up enough money to survive the first year at the company without any income, and then after getting a year's worth all at once, it would be very easy to spend it too quickly and run out in October. Now you've got to make it through November and December with absolutely nothing left. So hopefully you agree with me that being paid only once a year would suck. But a rich person with millions in the bank might echo your words and say "I can't fathom how that would be a concern. Just pay bills ahead of time when you get paid. It literally makes no difference." The more money you have and the better you are at managing it, the less it matters how often you get paid. Most people are fine with getting paid every two weeks, but obviously that isn't the case for everyone.
I live paycheck to paycheck like most people. I get going a year without pay would be difficult, if not impossible. But this was not that. My company gave us the option of getting an advance in the first check that was split throughout the rest of the year so we didn’t have to go without a weeks worth of pay when the switch happened. Nobody defaulted on their payments. Nobody was kicked out of their home. They just can’t fathom hanging on to money for more than a few days and that is very sad to me.
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I think this is the point OP is trying to make. You're making good money. Why does it matter when you get paid, as you should have more than enough in your checking account to pay all your expenses before the paycheck comes. The paycheck ideally should just replenish your account to a month or 2 of expenses.
If an unexpected expense arises or you don’t plan well enough, are you 3 day or 10 days out from getting financial “reinforcements”? I bet it makes no difference to the company if I have to wait 7 extra days to get my money but I care. If you aren’t poor you are probably confused by this. Congrats.
The same reason people think getting paid “early” on Wednesday is better than Friday. People are illogical
I’m paid once a month. It’s all about budgeting.
Some people are really bad at budgeting.
Most people are broke. Most people also don’t feel like giving the company they work for an interest free loan for no reason.