Understanding Bi-Weekly and Semi-Monthly Payrolls Career Advice

Monthly pay periods are the easiest and least expensive to administer, but they are also less popular with employees because they require careful planning and budgeting. Typically, some of the fields that favor biweekly pay are information, professional and business services, education, health services, leisure, and hospitality. For example, 52.9% of employees who work in education and health services are paid biweekly, making biweekly pay more popular than the three other pay schedule variants combined. Remember that not all months are the same length (for example, February), so keep in mind that some paychecks will be larger or smaller than others. Unfortunately, your second paycheck in February might only cover days, even if other months average days. If payday falls on a holiday or weekend, you will either need to advance or delay payroll, adding another responsibility to your plate.

• Companies that use semimonthly pay give employees 24 paychecks per year.
• A biweekly payroll schedule will typically be seen in the eyes of your employees as “dependable” and “consistent”.
• An employee who gets $51,000 per year will receive the same annual salary regardless of whether they are being paid semi-monthly vs. bi-weekly.
• Here is a preview of the bi-weekly pay schedule for the first six months of 2024.
• For instance, in the month of February, the second paycheck would cover only 13 or 14 days when in the rest of the months, it covers 15 or 16 days.
• In other states, however, companies are required to pay their employees at least on a bi-weekly basis.

We’ll cover all of this below and teach you how to pronounce both words, as well as use them in a sentence correctly. Sign up for a demo of Tapcheck to learn how it can revolutionize your paycheck system. You can also learn about many other commonly misused terms in the confusing words section here.

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This helps companies maintain stability, consistency, and efficiency in their payroll processes while supporting broader business objectives and financial management practices. If your payday falls on one of these “extra” days in the calendar year, you could have 53 weekly pay periods instead of 52, or 27 biweekly pay periods instead of 26. In addition to pay, this throws a wrench in things like payroll deductions for benefits. The most common pay periods are weekly, biweekly, semi-monthly, and monthly.

• An important thing to note about ‘bi-weekly’ is that it can also mean two times per week.
• Most often, you’ll be given one check at the beginning or in the middle of the month and another at the end of the month.
• Biweekly paychecks will be be for less money, but employees will receive the two additional paychecks to make up the difference.
• A semi-monthly or bi-monthly pay schedule means pay checks are distributed two times a month, usually on fixed dates such as the 1st and 15th, or the 15th and 30th.
• How often you pay employees is much more than an administrative decision as it affects your ability to attract and retain great performers.

For a full-time salaried employee, a payday includes the paycheck of 86.67 hours, that is for an entire year, the employer needs to pay for 2080 hours to the employee. These payday laws mandate firms and employers how the employees need to be paid based on their payment frequency. For a full-time salaried employee, a payday includes the paycheck of 80 hours, that is, for an entire year, the employer needs to pay for 2080 hours to the employee. So, for example, once an employee starts working for a firm, two weeks from then, he could get his paycheck. Whether semi-monthly or biweekly payroll is right for your business will depend on several factors.

Why do companies pay on the 15th and 30th?

When you pay employees semimonthly, you can count on paying the same amount to employees each month. The extra two paychecks for biweekly pay frequencies can set your business back if you don’t properly prepare for months with three paychecks. You will need to make sure you have enough money in your payroll account to cover the additional expenses. With a biweekly pay schedule, there are two months in the year where employees receive three paychecks. Employees who are paid semimonthly always receive two paychecks per month.

Knowing the difference between biweekly vs. semimonthly payroll can prevent financial setbacks, keep your business legally compliant, and more. As you can see, this employee worked all the expected regular hours during both pay periods in July. The employee received three hours of overtime pay on July 15th for the first pay period. The second workweek of the month (July 10th – July 16th) fell between the first and second pay periods. This caused five hours of overtime earned during the second workweek to be held until July 31st, along with one overtime hour earned in the fourth week of the month. With semi-monthly payroll, some weeks start and end in the same pay period.

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Contrary to popular usage, bi-weekly does not mean twice in the same week. So many speakers and writers use the term this way that there is now widespread confusion regarding the true meaning of the term. When you add these parts together, you get an adverb that means occurring every two weeks or every other week.

To combat this, you could run semimonthly payroll for salaried employees and biweekly for hourly workers. In a biweekly pay period or schedule, the employee is set to receive a paycheck every other week. Usually, the employers distribute pay checks on Fridays sticking to the same day every pay week. Thus, in this pay period, semi monthly vs bi weekly the employee receives 26 pay checks annually. If an employee earns a fixed amount or is salaried, the pay check received will be of the same amount every time it is received. In the case of hourly pay, the amount in the paycheck may differ as it will be as per the number of hours worked in that specific pay cycle.

Semi-Monthly vs Biweekly Payments: Which One is the Best for You?

Let’s also say the business operates Monday through Friday, and the employer defines the workweek as Monday through Sunday. Lack of Certainty- Moreover, there is a lack of certainty for the employees regarding which date they are going to get paid. The holidays and weekends coming into the play also create confusion about the payday. In case of holidays or weekends, the payment needs to be done in advance or delayed. This not only creates a lot of confusion but also disheartens the employees.

The semi-monthly payment mode is hard to predict as the pay on each month might differ by a day or two. This inconsistency in the days worked by a matter of one or two days could be covered by a period of several years why, which the employer can make up by adding the 27th paycheck. Don’t worry, you’re not going crazy, you just haven’t fully grasped the semi-monthly vs. bi-weekly payroll debate yet. Lucky for you, we’ve compiled a full guide on what makes these two types of payrolls different. Publications that occur twice per month and every other week also use the words ‘semi-monthly’ and ‘bi-weekly,’ respectively.