*This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Please read my disclaimer for additional details. Thank you for supporting the work I put into this site!
Almost every budgeting method out there requires that you write down your income and expenses to get started. How do you calculate your monthly income if you are on a biweekly paycheck schedule though? Some months you will have 2 paychecks and some months you will have 3.
There are several options available for those that have biweekly paychecks. There is no one right answer. It really all depends on your financial situation and your financial goals how you want to accomodate for your biweekly paychecks.
How Many BiWeekly Paychecks in 2019
The number of biweekly paychecks you will receive in 2019 is highly dependent on your pay period close date. Check with your human resources department to see if they have a payroll calendar for 2019 that specifies. Generally speaking though, you should have 26 paychecks for the 2019 year if you are on a biweekly schedule.
How to Calculate Monthly Income from BiWeekly Paychecks
Your gross monthly income can be calculated using this equation:
($ PAYCHECK AMOUNT X 26) ÷ 12 = Gross Monthly Income
While this gives you your gross monthly pay, it really isn’t a great number for budgeting. That money won’t reliably come in each month. It will work out as an average over the year but it would be hard to keep a budget based on this value.
There are some options though.
How to Budget BiWeekly Paychecks
If your gross monthly income can’t be used reliably for your budget what should you do?
There are two common methods recommended across personal finance blogs and I think they both have their benefits.
Budget for Two Monthly Paychecks
One common method is to budget for two monthly paychecks each month. You know that with your semi-monthly paycheck schedule you will be bringing home at least 2 paychecks every single month. Use that amount when writing your budget.
So what about months with that third paycheck?
There should be at least two months where you get an extra paycheck. Because you budget for two paychecks, you have a lot of options as far as how you can use these extra paychecks.
If you have debt, one great option is to throw that entire paycheck amount at your debt snowball or debt avalanche. This should take a measurable chunk out of your debt balance and give you more encouragement to keep going.
If you are already debt free, these extra funds are great to put towards funding your emergency fund or saving for big ticket items like a car or a house down payment.
Already own a home? Think about making a principal only payment each month. You’ll be amazed how much it will save you over the long run in interest! Check out this mortgage payoff calculator over at the Dave Ramsey site. It is a great way to see the impact!
Budget 3 Paycheck Months for 3 Paychecks
Zero based budgeters may feel more at ease just writing down three paychecks in the income column when they receive their extra paycheck. That money can then be allocated out just like any other income.
In this case, you may want to distribute it towards sinking funds like Christmas or back to school. Maybe you want to fill the “vacation” sinking fund category and be one step closer to a trip to Disneyland.
Whatever the case may be, incorporating the extra paycheck into your regular budget is just as good a step as any.
Calculating the monthly income when you are paid biweekly is as easy as multiplying your paycheck amount by 26 and then dividing that number by 12. Budgeting biweekly paychecks is usually approached differently though. One common method is to budget for two paychecks and use any third paychecks for debt or savings. The second common method is to budget 3 paycheck months for 3 paychecks and distribute however you see fit when that third paycheck hits.
Are you paid biweekly? If so, how do you handle it each month? I’d love to hear your thoughts in the comments!
A little about me: I’m a single, working mom who knows what it is like to be deep in debt. There was a time in my life where I was even caught in the vicious payday loan cycle just to stay afloat. Now, I’m debt free and saving for a home. I love educating others and want to share the ideas and strategies that allowed me to pay off debt and continue to live within my means.
Get access to our FREE resource library.
Join our mailing list to receive the latest news from our blog and get access to our FREE resource library.