One salary, two paydays: Could Anupam Mittal’s payroll idea work in India?

Source : INDIA TODAY NEWS

Imagine this: it is the 15th of the month and your phone buzzes with a notification, “50% salary credited.” Then, on the last day of the month, or the first day of the next month, another message arrives with the remaining amount.

Sounds appealing, doesn’t it?

For many employees juggling rent, EMIs, credit card bills and everyday expenses, receiving their salary twice a month may sound like a dream. But what if it wasn’t just a dream? What if India moved away from its traditional monthly salary cycle and adopted a bi-monthly payroll system?

The debate recently gained traction after entrepreneur Anupam Mittal, founder of Shaadi.com and one of the judges on Shark Tank India, argued that companies should rethink when employees get paid.

In a LinkedIn post, Mittal posed a simple question: “When should you get paid?”

He argued that while companies often promote perks such as flexible work arrangements, free meals and generous leave policies, they tend to overlook what employees value most — timely access to their earnings.

According to Mittal, many Indian companies credit salaries during the first week of the following month. Even organisations that aim to pay on the first day of the month sometimes face delays because of weekends, bank holidays or administrative issues.

At Shaadi.com, however, the company decided years ago to change that approach.

“A few years ago, we decided salaries should go out at the end of the current month, not in the following month. Not as a perk. But as common sense,” Mittal wrote.

His reasoning was straightforward. What may appear to be a minor delay on paper can have significant consequences for employees. A week’s delay could mean a bounced EMI, difficulty paying rent, an uncomfortable conversation with a landlord, or hours spent resolving avoidable financial issues.

“Cash flow is dignity,” he argued.

Mittal then took the idea one step further. He suggested that companies should consider paying salaries twice every month, once on the 15th and again on the 30th.

According to him, better cash flow could reduce financial stress, lower dependence on short-term borrowing, improve spending power and even provide a modest boost to economic activity.

In his view, it is a win for employees, employers and the economy alike.

WHAT IS A BI-MONTHLY SALARY SYSTEM?

Before examining whether such a model could work in India, it is important to understand what a bi-monthly payroll system actually means.

Under a traditional monthly salary system, employees receive their entire salary in a single payment every month.

A bi-monthly system divides that salary into two payments, usually made on fixed dates such as the 15th and the last day of the month.

BI-MONTHLY IS NOT THE SAME AS BI-WEEKLY

One common source of confusion is the difference between bi-monthly and bi-weekly payroll systems.

A bi-monthly schedule means employees are paid twice each month, resulting in 24 pay cheques annually.

A bi-weekly schedule, on the other hand, means employees are paid every two weeks. Since a year includes 52 weeks, employees receive 26 pay cheques annually, with some months having three paydays instead of two.

HOW DO OTHER COUNTRIES PAY SALARIES?

Around the world, there is no single standard payroll system.

Many countries allow employers to choose from multiple payroll frequencies, including weekly, bi-weekly, bi-monthly and monthly schedules.

Countries such as Argentina, Australia, Brazil, Canada, Denmark, Egypt, Finland, New Zealand, the Philippines, Russia, Singapore, South Africa, the United Kingdom and the United States commonly use a mix of payroll systems depending on industry, company size and local regulations.

The existence of multiple models raises an interesting question: if other economies can operate with more frequent salary payments, could India do the same?

CAN A BI-MONTHLY SYSTEM WORK IN INDIA?

India predominantly follows a monthly payroll cycle. Employees typically receive their salaries on the last day of the month, the first day of the following month, or sometime during the first week.

For many workers, this arrangement works reasonably well. However, for millions of salaried employees, cash-flow timing can sometimes become a challenge. Rent is due on one date, EMIs on another and credit card bills on yet another. When salary dates do not align with these obligations, workers may find themselves relying on savings, salary advances or short-term credit to bridge the gap.

Supporters of a bi-monthly payroll system argue that receiving income more frequently could help employees manage expenses better and reduce financial stress.

Critics, however, point out that more frequent payroll processing could increase administrative costs, create compliance challenges and may not necessarily improve financial discipline.

The debate, therefore, extends far beyond convenience. It touches on employee well-being, workplace practices, payroll technology and even broader questions about how modern economies should compensate workers.

As payroll systems become increasingly automated and digital, the question is no longer whether paying employees twice a month is possible.

The real question is whether India should rethink a salary system that has remained largely unchanged for generations.

To find out, we spoke to Anil Agarwal, Co-founder and CEO of InCruiter.

“From an employer’s perspective, yes, but you need to be honest about why you’re doing it. They work better for company cash flow than they do for employee welfare. The system itself isn’t bad, but Indians have built their entire financial life around monthly cycles. Rent is due on the first. Kids’ school fees are monthly. EMI payments are monthly,” Agarwal said.

According to him, introducing a bi-monthly payroll system without addressing these structural realities could create more problems than it solves.

“So can it work? Yes. Should you just implement it without understanding employee impact? No,” he added.

WILL EMPLOYEES ACTUALLY MANAGE MONEY BETTER?

One of the strongest arguments in favour of bi-monthly salaries is that more frequent pay cheques could help workers manage their finances better and reduce dependence on credit cards, salary advances and short-term loans.

However, Agarwal is not convinced.

“Unless you fundamentally change employee spending behaviour. I’ve studied this with our own teams. Giving someone money twice instead of once doesn’t automatically make them financially responsible,” he said.

“If someone spends 30,000 on day one of a 60,000 monthly salary, they’re not suddenly going to spend 15,000 on day one of receiving 30,000. They’ll just borrow against the next payout. The problem isn’t the payment frequency. It’s financial literacy and wage stagnation,” he added.

In other words, receiving salaries more frequently may not automatically translate into better financial management. Without improvements in spending habits and financial literacy, employees may continue to face the same money-related challenges regardless of when they are paid.

THE CHALLENGES COMPANIES WOULD FACE

Even if the idea sounds attractive in theory, implementing it would not be easy.

According to Agarwal, Indian labour laws, tax systems and payroll processes have been designed around monthly salary cycles.

“India’s labour laws and tax systems are built around monthly salaries. Switching frequencies creates complications with PF contributions, gratuity calculations and statutory bonuses. Your HR team will struggle. Your payroll vendor, your banking setup and your accounting systems are all calibrated for monthly processing. Changing it costs money and time,” he explained.

There is also the question of employee perception.

“When we talk to candidates about working conditions, they care about base pay, benefits and career growth. Changing to bi-monthly salaries without their input can feel like the company is trying to squeeze them. We’ve lost good people over smaller changes,” he said.

CAN IT ATTRACT YOUNGER TALENT?

Another question is whether paying employees twice a month could help companies attract and retain younger workers.

The answer appears to be: perhaps, but only to a limited extent.

Today’s workforce, particularly younger professionals, tends to prioritise flexibility, career progression, learning opportunities, workplace culture and compensation growth over payroll frequency.

A bi-monthly salary system may initially catch their attention and even be viewed as a positive benefit. However, it is unlikely to be a decisive factor when choosing between employers.

As Agarwal points out, employees ultimately care more about how much they earn, how quickly they can grow and how well the organisation supports their career ambitions than whether their salary arrives once or twice a month.

THE BOTTOM LINE

The idea of bi-monthly salary payments certainly sounds attractive. More frequent access to income could help some employees manage cash flow better and reduce the stress of waiting for payday.

However, experts caution that payroll frequency alone is unlikely to solve deeper financial challenges. Without improvements in financial literacy, wage growth and spending habits, many employees may continue to face the same pressures regardless of how often they are paid.

For companies, meanwhile, shifting away from the traditional monthly payroll cycle would involve operational, legal and administrative hurdles.

So while paying salaries twice a month may be technologically possible, whether it becomes the future of payroll in India remains an open question.

– Ends

SOURCE :- TIMES OF INDIA