March 12, 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.
- 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
- 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.