3 Key Differences Between Semi-Monthly vs Bi-Weekly Payroll

Let’s first look at the unique attributes and https://www.bookstime.com/ of the biweekly pay schedule. Before choosing, keep in mind that states regulate how often employees must be paid and some states may not allow ceretain pay frequencies. Businesses should check with their state before choosing how often to run payroll. For example, running semi-monthly payroll for your hourly employees can be challenging, especially if they racked up any overtime pay.

When it comes to Semi-Monthly payroll, new hires will typically need to wait 4-6 weeks before receiving their first paycheck. This depends on the day they started in comparison to the payment schedule.

Biweekly vs. semimonthly payroll: Chart

Months with “extra” paydays can impact cash flow, so it’s important to account for them during cash flow planning. Industries have the liberty to choose between four pay schedules. They include weekly, bi-weekly, semi-monthly, and monthly payments.

• For a semi-monthly employee, you have to divide 2,080 by 24 pay periods .
• Each offers advantages and disadvantages for employees and those who prepare the payroll.
• The extra two paychecks for biweekly pay frequencies can set your business back if you don’t properly prepare for months with three paychecks.
• When you run payroll on one specific date, some pay periods might have fewer or extra days.
• Different payroll providers can tack on additional costs for each occasion payroll is run.
• Understanding the differences and the consequences allows entrepreneurs and small business owners to make the decision about what payroll setup best suits them and their workplace.

A bi-Biweekly vs Semimonthly Payroll payroll occurs every other week, such as every other Friday. A semi-monthly payroll occurs twice each month on specific dates, such as the 15th and 30th. In February, the end-of-the-month pay date would need to be moved forward for semi-monthly paychecks, in addition to those that fall on a weekend. The hourly difference occurs because of the distinction in the number of paychecks the employees will receive. For a biweekly employee, you must divide 2,080 by 26 pay periods . For a semi-monthly employee, you have to divide 2,080 by 24 pay periods . There are some important differences when it comes to semi-monthly vs. biweekly payroll.

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Semi-monthly schedules have fixed dates, so you can manage bills with those dates in mind. Also, the salary deduction remains constant when you get paid twice a month.

• In contrast, we recommend the semi-monthly system for full-time salary employees.
• Reporting of time in TimeClock Plus is still required for non-exempt employees.
• With weekly pay periods, the employers pay based on the weekly work hours.
• Save money if your payroll provider charges you for every payroll run .
• If you contribute a flat dollar amount each pay period to TIAA you may want to consider changing the amount.

The weekly pay is at the end of every week, while the bi-weekly pay is once every two weeks. Also, the semi-monthly pay occurs twice a month on a specific date. Meanwhile, the monthly pay occurs once a month on a specific date too. Another difference between both pay periods is the payment amounts. Typically, semi-monthly paycheck amounts are higher than bi-weekly amounts. This is because the former happens less frequently than the latter. However, the two extra paychecks in a bi-weekly pay period cover this gap.