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The Pros and Cons: Biweekly vs Semimonthly Payroll

biweekly vs semimonthly payroll

As a result of the pay frequency difference between semi-monthly and bi-weekly payroll, semi-monthly employees receive 24 paychecks each year, while biweekly employees receive 26. Bi-Weekly pay is when employees are paid every other week on a specific day. For example, a bi-weekly pay frequency on a Thursday would mean employees get paid every other Thursday of the month. With bi-weekly payroll, employees are paid 26 paychecks a year, compared to 24 like bi-monthly receives. For obvious reasons, paying your hourly staff biweekly makes it a much easier and less troublesome way to calculate your employee payment amounts. Yet, it is less expensive to process salaried workers semi-monthly. Remember, a semi-monthly payroll requires less processing, as it happens 24 times a year rather than 26 times a year, and so can save the company money.

Again, even if you’re no accounting whiz, the numbers here are pretty straightforward. Perhaps your hourly employees want to double-check that their paychecks are in the right amount. Or, maybe your salaried workers want to get more granular and see what their hourly earnings are.

Pros of SemiMonthly Pay

Now that you’ve determined which payroll frequency is right for you, it’s time to compare service options. Payroll is one of the most important aspects of running your business, yet shopping for payroll services can be confusing. After learning the difference between semi-monthly and bi-weekly payroll, let’s look at the pros and cons of each. When it comes to semi-monthly vs. biweekly, there is literally no difference in the amount per year your employees will be paid. 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.

  • And employees are still able to get their full salary on the final payroll date of February which is on the last business day of the month, even if it falls on the 26th or 29th.
  • To combat this, it may be beneficial to process payroll semimonthly for salaried employees and biweekly for hourly workers.
  • It is prudent to understand here that whether a salaried employee is paid biweekly and semi-monthly, it will leave no impact on the annual pay drawn by you.
  • If in the next two weeks they work 45 hours, they would get paid for 45 hours.
  • Payments are uniform across each pay period, which can decrease the necessity of adjusting entries at the end of the month.

With a bimonthly payroll, also called a semimonthly payroll, employees are paid twice each month. Most companies pay on the same dates every month, usually the 1st and the 15th. Running semimonthly payroll can also be difficult to track when weekends and holidays come into play. If a pay day falls on a weekend or holiday, you have to decide to either advance or delay payroll for that pay period, which adds another responsibility to your plate. If your company follows the semi-monthly pay schedule, you’ll receive your paycheck two times in a month.

Choosing between semimonthly vs. biweekly payroll

The bridge payment will help lessen the impact of not having a regular paycheck during this time. Gusto offers excellent payroll processing for small businesses, with several plans available to choose from. Gusto includes flexible payroll schedules, unlimited payroll runs, and multistate payroll https://www.bookstime.com/ capability. Biweekly pay is the most common option for pay periods, with 36.5% of private U.S. businesses paying their employees on this schedule. Running a semi-monthly pay for non-exempt employees can be challenging. It is significantly different from the more common bi-weekly payroll system.

biweekly vs semimonthly payroll

Bimonthly pay could work best for salaried employees, while biweekly may be optimal for hourly employees, who then receive biweekly vs semimonthly payroll a more consistent paycheck. Bimonthly payroll processing can introduce more challenges compared to the biweekly approach.

The Pros and Cons: Biweekly vs. Semimonthly Payroll

It all depends on what makes the most sense for your unique business restrictions. In general, bi-weekly payrolls are used by companies that pay their employees a low to average hourly wage. If your employees punch in and out and work a different amount of hours each week, then a bi-weekly payroll will make more sense.

How to Choose a Pay Schedule for Your Business – businessnewsdaily.com – Business News Daily

How to Choose a Pay Schedule for Your Business – businessnewsdaily.com.

Posted: Wed, 16 Feb 2022 16:49:58 GMT [source]

This isn’t a problem with salaried employees, and you might consider using different pay schedules for salaried and hourly workers. You need to consider how many employees you have and whether those employees are hourly or salaried. To combat this, you could run semimonthly payroll for salaried employees and biweekly for hourly workers.