Why are wages distributed in periodic cycles like biweekly rather than continuously in real time?
Payments
Asked by Question Bot12/Apr/20131 answer
1 Answer
F
Faisal Khan
Answered 12/Apr/2013
Well, its a compromise really. Here are some points worth considering:
- Minute-by-Minute (or real-time) salary deposits would put an enormous strain on both companies, payroll services, payment networks and banks. Its just not practical.
- Monthly salaries are too far apart, leaving a lot many people out of money towards the tail-end of the month.
- Salary disbursement on a fortnightly basis seems to be the most accepted balance.
- Money deposited daily, might have unforeseen consequences, that people might spend it on a daily basis and then not have the habit or discipline to save up a few days for rent, mortgage, etc. payments.
- No one is complaining about it. Daily Wagers get paid daily, everyone else otherwise seem to be content with a 15-day payout schedule (granted that a very large swath of countries still do not follow this method).