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November 15, 2017

Bi-Weekly vs. Semi-Monthly Basics 201

Bi-weekly and semi-monthly payrolls are the most common pay frequency among employers. The terms “bi-weekly” and “semi-monthly” can be a little confusing when it comes to payroll. Both prefixes, “bi” and “semi” mean “two or twice” but have different meanings, especially when it comes to scheduled payroll dates. Bi- means “every other” or “every two” while semi- means “half” or “twice” in the sense that it happens two times.

In payroll, bi-weekly means employees are paid every other week, while semi-monthly means employees are paid twice a month. Typically, each month for bi-weekly payrolls, employees also paid twice a month, but two months out of the year, employees are paid three times, instead of two. Confused yet? If you are, hopefully we can clarify a thing or two about the difference of bi-weekly and semi-monthly pay frequencies. Even though they tend to stay together throughout the year, there are several differences and implications in payroll.

Bi-weekly

  • Every other week or every 2 weeks
  • 26 payrolls in a year (52 weeks in a year / 2 weeks)
  • Salaried employees typically work 80 hours each pay period (2,080 hours / 26 payrolls)
  • Hourly employees’ overtime is easily calculated
  • Employees will know it will be (every other) weekday;
  • More consistent and preferred for employees. They know when the payday is coming – (i.e. every other Friday)
  • The number of days in the pay period is consistently 10 workdays or 14 total days (two 7-day workweeks)
  • Less consistent for budgeting for employers and employees, as some months have 3 payrolls in a month & are different dates in the month

Semi-Monthly

  • Twice a month or every half month
  • 24 payrolls in a year (12 months  x 2 times)
  • Salaried employees typically work 86.67 hours each pay period (2,080 hours / 24 payrolls)
  • Hourly employees’ overtime often crosses over pay periods. Sometime that means extra work for those calculating payroll hours (contact us to learn more about how our timekeeping solutions can solve this issue for your company)
  • Employees are typically paid on the 15th/End , 10th/25th of the month, etc and they fall on different days of the month (depending on month, weekends, holiday, etc)
  • The number of days in the pay period changes depending on day of month; it might be 16 days or 15 days, depending on how many days are in the month (31 days, 30 days or 28/29 days in February)
  • More consistent for budgeting for employers and employees; it works great for paying bills (as paydates are always on the 15th for instance)

Just remember, a bicycle is a cycle with 2 wheels, and in payroll, biweekly means you’re paid every 2 weeks. And while we’re on the topic of transportation in Portland, how about those semi-trucks we love driving next to on the freeway? I bet you didn’t know that a semi-truck is a trailer without the front wheels, so about half of it is missing. In payroll, that means you’re paid halfway through the month as well as the final half, depending on your payroll schedule.

Of course, we must not forget about monthly and weekly payrolls. Monthly is once a month, paid 12 times a year, and weekly is once a week, paid 52 times a year. Weekly is the most preferred by employees, but payroll processing cost is the highest, as this requires more times in a year to process payroll, therefore is not very common.

 

November 1, 2017

Don’t “Fall Back” On the Clock – Daylight Savings End

The leaves are falling, morning commutes are a little darker, and November is finally here. That means for the majority of us in America, Daylight Savings Time End is just around the corner. On November 5, 2017, at 2:00AM, we will be gaining an extra hour of sleep! But what does that mean for my employees who are scheduled for the night shift and “on the clock” at 2am on Sunday morning?

Employers are required to pay employees for all hours worked. Non-exempt employees who are on the clock at 2:00am on November 5th are essentially working the 1:00 – 2:00AM hour two times, therefore they must be paid one additional hour, unless there is already anticipation of the change in time in scheduling. Keep in mind the overtime pay implications during this time change, as well. Employees may be entitled to overtimes due to Daylight Savings ending. Be sure to include the additional hours worked into both regular and overtime hours calculations.

Our timekeeping solutions are so intuitive and automatically account for these changes depending on your time zone. Contact us today for more information!