Time & Attendance Articles

Semimonthly vs Biweekly Payroll

Two of the most common payroll cycles are semimonthly and biweekly. While biweekly and semimonthly pay cycles are very similar, the difference lies in the number of times employees are paid in a year. Semimonthly payroll pays employees twice a month, often on the 1st and 15th of the month, meaning that employees are paid 24 times in a year. Biweekly payroll is paid out every other week, usually on a Friday. Since there are 52 weeks in a year, employees are paid 26 times in a year. 

While a biweekly pay cycle results in 2 additional checks each year, employees are not paid more in a year than they are if payroll is semimonthly. Instead, the difference in number of checks impacts the amount per check slightly. Let's look at an example to demonstrate how this works.

If an employee makes $36,000 a year and they are paid semimonthly, they will receive a $1500 check two times a month. Following a biweekly payroll, the same employee would take home $1384 every other week, and will take home 2 "extra" checks a year compared to semimonthly, but the total is stil $36,000.
 
Payroll Frequency Checks per Year Check Amount Total Wages
Semimonthly 24 $1500 $36,000
Biweekly 26 $1385 $36,000
Weekly 52 $692 $36,000

Biweekly is usually the more desirable pay frequency, because payroll can be be completed on the same day every other week, making it easy for employers and employees to prepare for. Semimonthly payroll can be more complex because when the 1st or 15th falls on a weekend or a holiday, employers must make sure they handle payroll ahead of schedule. With either pay schedule, employees are paid the same total amount, so the decision on which payroll period to follow should be made based on which cycle makes the most sense for your business.