Because Semi-Monthly pay occurs on the same two days every month, it takes the guesswork out for employees. Employers do not have to hear “when do we get paid” because those days are solid. Having fixed paydays also allows employees to budget their finances effectively. Because semi-monthly and bi-weekly payroll are two of the most popular payroll frequencies, choosing between them will be difficult.
Though it is the most cost-effective option for employers, employees are forced to wait a whole month to receive each pay check. Bi-weekly pay schedules are the most common, especially in the United States due to state laws. If you choose this pay schedule, you will be paying your employee once every two weeks on a designated day of the week. This means that in a year, you would pay your employees 26 times. Infrequent paychecks mean they have to wait longer and strictly budget their money between pay periods. And it may take longer for new hires to receive their first paychecks.
Biweekly payroll cycles
While biweekly may sound like it means twice per week, the correct term for that would be semiweekly. The prefix “bi” means two, so it’s a one-word way of saying two weeks. We recommend you take the three key differences and pros and cons between semi-monthly vs bi-weekly payroll when making your decision. A notable benefit of semi-monthly pay is that it aligns with the business’ cycle. Since employees get paid around the same time as the business makes money, it is easier to pay them on time.
Deciding on a pay frequency for a small business is an important decision. Pay frequency determines how often the business must process payroll and when employees receive their paychecks. There are four common pay period options, including weekly, biweekly, semimonthly, and monthly. Two popular, yet easily confused, pay periods are biweekly and semimonthly.
Semi-Monthly Pay vs. Bi-Weekly: Understanding the Difference
Using bi or semi in front of time periods can create tremendous confusion these days as definitions and style guidance continue to soften and blur. Considering the fact that one of the main purposes of working is being paid, it’s vital to research the nature of your pay. Contrary to popular usage, bi-weekly does not mean twice in the same week.
If you’re outsourcing to a payroll provider or accountant, they may charge a service fee for every payroll run. But if you’re using a payroll service for your small business, you may not have to pay extra for every payroll run. Semi-monthly and bi-weekly sound like the same thing, but there are some key differences between these two payroll schedules. There are a few major differences between semimonthly and biweekly pay, so let’s go through them immediately.
Does Semi-monthly Mean Twice a Month or Every Two Weeks?
But before detailing how to structure semi-monthly pay for your company, it’s first important to clearly understand what semi-monthly pay means. Depending on several factors, employers choose to pay their employees biweekly, weekly, monthly, and semi-monthly. In this article, we’ll discuss the difference between bi-weekly and semi-monthly pay periods. Depending on the choice made between the two, the budget of a company is impacted. A biweekly schedule does require some more attention in order to keep track of when you’re paid, as the pay dates shift.
So many speakers and writers use the term this way that there is now widespread confusion regarding the true meaning of the term. When you add these parts together, you get an adverb that means occurring every two weeks or every other week. The word weekly is an adverb and adjective that means occurring once in a week. A bicycle, for instance, has two wheels, and a bicameral legislature (like the one in place in the United States government) has two houses. I will use each of these words in a few example sentences to demonstrate how they should appear in context. Sign up for a demo of Tapcheck to learn how it can revolutionize your current paycheck system.
The Pros and Cons: Biweekly vs. Semimonthly Payroll
Your pay frequency determines how often you process payroll and when employees receive their paychecks. Whether a business’s employees are salaried or hourly, it will likely make sense for them to choose one pay frequency over the other. For example, it can be more difficult to process the paychecks of hourly employees on a semi-monthly basis than on a bi-weekly basis. Because hourly wages are easier to calculate on a bi-weekly basis, as each paycheck accounts for the same number of days. Conversely, semi-monthly paychecks will vary in the number of days they include, making it more challenging for whoever handles the company’s payroll. With a biweekly pay schedule, there are two months in the year where employees receive three paychecks.
Something that happens every two weeks also happens twice in a month, so bi-weekly and semi-monthly are de facto synonyms. Hearing the terms ‘bi-weekly’ and ‘semi-monthly’ might sound confusing if you’ve never come across them before. So, what’s the difference between these phrases, and what do they mean exactly? We’ll cover all of this below and teach you how to pronounce both words, as well as use them in a sentence correctly. The terms ‘bi-weekly’ and ‘semi-monthly’ are often mistaken for one another, so let’s break down the differences.
If you don’t adequately prepare for months with three paychecks, the extra two paychecks for biweekly pay frequencies can set your business back. 36.5 percent of employees are paid biweekly, according to the Bureau of Labor Statistics. It’s easy to handle biweekly hour employees’ payroll, but it’s a little trickier to manage semimonthly hourly employees’ payments. Also, with a bi-weekly pay schedule, your check amounts would be lower, but your paydays would be consistent. On the other hand, if you got paid semi-monthly, you’d get higher paycheck amounts and inconsistent paydays.
We’ve also got a whole library of content on other confusing words and phrases you might see while learning the language. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Business owners love Patriot’s award-winning payroll software. If you have a staff meeting every other Wednesday, you will usually have two such meetings per month (i.e., semi-monthly). Monthly is an adverb or adjective that means occurring once a month.
When overtime and specific hours need to be determined weekly, it can be challenging to adapt to a semi-monthly pay schedule. Since the commission and hourly wages need to be divided between two different pay periods, it can be difficult for employers to adjust without needing to do it separately. Semimonthly pay schedules are those that pay out twice each month regardless of the number of days in a month. Employees receive one payment in the middle of the month (typically the 15th) and the other on the month’s first or last day. Therefore, employees on a semimonthly pay schedule will receive a total of 24 paychecks each year (two for each month).
How Many Paydays in a Month?
Navigating this ocean may be difficult at times, but ultimately, you need to know which jobs will best fit your qualifications and lifestyle. Following Semimonthly vs biweekly a semi-monthly pay-schedule has its own advantages and benefits. Get up and running with free payroll setup, and enjoy free expert support.
The right pay schedule will benefit both you and your employees. Finding the right payroll cadence for your business is important. Hopefully, by understanding each option, you can choose the right payment schedule for your small business. Most months contain three full weeks, as well as enough extra days to bring the total up to 30 or 31 days. The key to this puzzle lies in the meanings of the prefixes semi- and bi-.
Benefits of a Bi-weekly Payroll System
For example, the employer may track hours for the first and second week of the month but pay in the third week. That way, employers don’t have to wait for current timesheets before they can run payroll. In semi-monthly frequencies, payroll is processed fewer times than biweekly, so employees’ paychecks are larger. Furthermore, biweekly paychecks are smaller, but employees will receive two extra paychecks to make up the difference.
- Because semimonthly schedules can consist of 15 to 16 days, hourly employees may report different hours each cycle.
- Whether a person is a non-salaried full-time employee, the same figures hold true.
- I will use each of these words in a few example sentences to demonstrate how they should appear in context.
- However, the percentage of employees who receive semimonthly paychecks in these fields is still lower than the percentage who receive biweekly ones.
- Monthly is an adverb or adjective that means occurring once a month.
- This means that in a year, you would pay your employees 26 times.
An employee would receive 24 paychecks per year with a semi-monthly pay schedule 26 paychecks per year with a bi-weekly pay schedule. Although not the most common type of payroll, semi-monthly pay schedules are still frequently used among businesses around the world. The most commonly asked question about semi-monthly payroll is whether it means twice a month or every two weeks.
That means that you can end up being paid on any day of the week, depending on when the 15th and last days fall. If it falls on a weekend day, then it’s usually paid the Friday before. Some states may not allow certain pay schedules or require a minimum pay period. Some states may also require employee consent and additional paperwork for certain pay schedules.