Biweekly vs Semimonthly Payroll Understand the Difference

Because hourly wages are easier to calculate on a bi-weekly basis, as each paycheck accounts for the same number of days. Conversely, semi-monthly paychecks will vary in the number of days they include, making it more challenging for whoever handles the company’s payroll. As you can see, there are many factors to consider when deciding when and how often to pay your employees. While some options, such as weekly, monthly, and bi-weekly pay periods, are common, a semi-monthly pay schedule may be difficult to understand.

• If you’ve ever been employed before, you’ve likely had a biweekly pay schedule at least once.
• Naturally, a salaried paycheck will be less on average each biweekly payday, but each schedule’s totals will remain the same over the course of the year.
• Once again, you’ll have to weigh your talent management goals against your administrative capabilities to find the ideal schedule for your payroll processing.
• Since the number of days in a month varies, some pay checks may be smaller or larger than the others.
• The rule of thumb is to pick semi-monthly if you are a salaried employee and bi-weekly if you are an hourly employee.
• Deciding on a pay frequency for a small business is an important decision.

A semi-monthly pay period can help businesses manage money and track employee pay more easily, improving financial organization. Generally, a semi-monthly pay schedule, or pay period, fits well with business cycles. It integrates smoothly with monthly accounting, budgeting and forecasting, cash flow management, and performance evaluation.

Want More Helpful Articles About Running a Business?

If certain tasks, such as budgeting and cash flow projections, are more challenging for your company and HR team, consider switching to a different pay frequency. The difference between ‘semi-monthly’ and ‘bi-weekly’ when it comes to payroll is that the number of checks you get is slightly different. A semimonthly would be a great choice for an entrepreneur who wants to put the same amount of money into their payroll each month.

• It’s also worth considering your employees’ unique needs and whether a biweekly pay schedule would be more beneficial.
• Frequent pay periods increase workload because of additional calculations, data entry, and processing.
• The paycheck amount is slightly smaller for the bi-weekly pay as it is more frequent.
• Biweekly pay periods run a close second among small businesses at 32%.

Biweekly pay and semimonthly pay can be confusing because employees generally receive two payments per month. Your employees work very hard for you and put in a lot of time and effort in the job given to them. They expect timely payments to be made so that they can handle their household expenses and also save something for their future. Thus, businesses must arrive at a decision that is mutually beneficial for both of them. Choose a pay period that is beneficial for the employee, employer, and the business. This knowledge and understanding are advantageous for the business as a payment schedule can be chosen that is to its best advantage.

What is Semi-Monthly vs Bi-Weekly Payroll?

Rachel Blakely-Gray is a writer for Patriot Software, a provider of payroll and human resources management solutions for small businesses. Employees’ holidays depend on the business firms as they can choose the weekly one-day holiday. With roughly four weeks in a month, these pay models almost seem synonymous at first glance.

If you’re looking for more, we created this handy table showing the pay dates for bi-weekly and bi-monthly pay. A biweekly payroll schedule will typically be seen in the eyes of your employees as “dependable” and “consistent”. semi monthly vs bi weekly Also, your payroll clerk will be able to keep a consistent schedule and pace with how they distribute them. The one downside to biweekly payments is the inconsistency in how much money you are paying out each month.

Factors Influencing Payroll Choice

Two of the most popular paydays companies favor are Thursday or Friday. Overall, when you have a biweekly pay schedule, you’ll receive 26 paychecks per year. Whether a business’s employees are salaried or hourly, it will likely make sense for them to choose one pay frequency over the other. For example, it can be more difficult to process the paychecks of hourly employees on a semi-monthly basis than on a bi-weekly basis.