Semimonthly vs Biweekly Payroll

Common Payroll Frequencies

Two of the most common payroll cycles are semimonthly and biweekly. While these two options are very similar, the difference lies in the number of times and amounts that employees are paid in a calendar year.

Semimonthly payroll pays employees twice a month.  This is often on the 1st and 15th, meaning that employees are paid 24 times in a year.

Biweekly payroll is paid out every 14 days. This is traditionally on a Friday. Since there are 52 weeks in a year, employees are paid 26 times in a year.

Payroll Frequency & Paycheck Amount

A biweekly pay cycle results in exactly 14 days each pay period. As a result, paycheck amounts for workers with set hours will not vary.  Using a semimonthly payroll will cause hourly employee paychecks to vary a bit, depending on the number of work days and days off falling into each period. 

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 is impacted in the amount per check.

Let's consider a simple example for a salaried employee:

If a salaried employee makes $36,000 a year and they are paid semimonthly, they will receive gross pay of $1500, two times a month. Following a biweekly payroll, the same employee would have a gross pay of $1384 every other week, but receive 2  additional checks each year, so the total is still $36,000.

Choosing A Payroll Frequency

Selecting a payroll frequency is a matter of convenience, economics, and sometimes even a historical tradition within certain trades and industries. 

Biweekly payroll was historically a more desirable pay frequency because each cycle always contains two full weeks. This greatly simplifies weekly overtime calculations and adds predictability since the payroll day and amount will not vary paycheck to paycheck.

Semimonthly payroll has become a popular payroll frequency. Modern automated employee time tracking and payroll systems eliminate the complexity of weekly overtime tracking and time tracking for partial weeks. This can bring employers significant time and cost saving by running fewer payroll cycles each year.

About Redcort Software

Redcort Software is the publisher of by Virtual TimeClock, a powerful, easy to use program that simplifies time tracking, streamlines payroll, and empowers your workforce. Download a free trial of Virtual TimeClock to see it in action for yourself without any cost or obligation.