Biweekly vs. Semimonthly Payroll

Deciding on apay frequencyfor your small business is an important decision. Your pay frequency determines how often you process payroll and when employees receive their paychecks. Two popular, yet easily confused, pay periods are biweekly and semimonthly.

Knowing the difference between biweekly vs. semimonthly payroll can prevent financial setbacks, keep your business legally compliant, and more.

两周薪和半月薪有什么区别?

有四种常见的薪酬周期选择,包括每周、两周、半月和每月。

Want more information on all pay frequency types?

Download our guidePay Schedules: The Cornerstone of Running Payroll,了解更多。对了,我们说过这是免费的吗?

双周工资和半月工资可能会混淆,因为员工通常每个月会收到两次工资。然而,在这些支付周期中,还有比我们所看到的更多的东西。

Number of paychecks per year

With a biweekly pay schedule, there are two months in the year where employees receive three paychecks. Employees who are paid semimonthly always receive two paychecks per month.

Companies thatrun payroll每两周发放一次,每年总共发放26张工资支票。使用半月工资的公司每年给员工24张工资支票。

Paycheck amounts

因为你每半个月发一次工资,而不是每两周发一次工资,你的员工的工资将会更高。Biweekly paychecks will be less money, but you will provide the two additional paychecks to make up the difference.

Let’s say an employee makes $42,000.00 per year. If they are paid biweekly, their gross wages would be approximately $1,615.38 every other week ($42,000.00 / 26). If they are paid semimonthly, their gross wages would be $1,750.00 ($42,000.00 / 24).

Over the course of a year, the employee will receive the same amount of money and owe the same amount of taxes, regardless of which payment frequency you use.

Payday

Another difference between semimonthly vs. biweekly pay is what day of the week you run payroll and which day employees receive their paychecks.

If you run a biweekly payroll, employees receive their wages the same day each pay period. For example, your employees are consistently paid every other Friday, so you run payroll on the same day each pay period.

With semimonthly payroll, you pay employees on specific dates, such as the 15th and last weekday of each month. However, the days differ. An employee might get paid on a Friday and Tuesday.

Popularity

Biweekly payroll is the most popular payment option. According to theBureau of Labor Statistics, 43% of employees are paid biweekly. On the other hand, only 19% of employees are paid using the semimonthly payroll frequency.

Biweekly vs. semimonthly payroll: Chart

Want to compare the two pay frequencies at a glance? Use our quick-reference chart to clear up some confusion.

Biweekly Payroll Semimonthly Payroll
# of Paychecks Per Year 26 24
Payday(e.g., Friday) Consistent Inconsistent
% of Employees Paid via this Method 43% 19%

选择半月工资还是两周工资

Deciding between biweekly vs. semimonthly payroll can be a difficult decision, especially because federal pay laws state that you must keep the same frequency throughout the year.

在选择之前,请记住,州政府规定了你必须支付员工工资的频率。在某些州,你可能无法使用双周或半月支付频率。Check with your statebefore choosing how often you run payroll.

Cons of running a semimonthly payroll

你需要考虑你有多少员工,这些员工是按小时计算还是按工资制计算。Running a semimonthly payroll for hourly employees is more difficult and confusing than doing so for salaried employees, especially when workers earnovertime pay. To combat this, you could run semimonthly payroll for salaried employees and biweekly for hourly workers.

The lack of consistency with semimonthly payroll can also be a turnoff for some businesses and employees. Because you must run payroll on a different day of the week, you could lose track of your responsibility. And, employees might not be sure which day they get paid.

Running semimonthly payroll can be particularly difficult to track when weekends and holidays come into play. Ifpayday falls on a holidayor weekend, you will either need to advance or delay payroll, adding another responsibility to your plate.

Cons of running a biweekly payroll

There are setbacks to running biweekly payroll, too. When you pay employees semimonthly, you can count on paying the same amount to employees each month. The extra two paychecks for biweekly pay frequencies can set your business back if you don’t properly prepare formonths with three paychecks. You will need to make sure you have enough money in your payroll account to cover the additional expenses.

Let’s say you have 10 employees who each earn $1,500 in gross wages per paycheck. You will need to have an additional $15,000 on hand both months that have three paychecks in them.

Also, keep in mind that some payroll providers charge you each time you run payroll. If you use one of these providers, you will pay more per year to run biweekly as opposed to semimonthly payroll. Or, you could choose a provider, like Patriot Software, that charges you the same amount, regardless of how many times you run payroll.

Are you looking for a way to streamline payroll? With Patriot’s onlinepayroll software, you can run payroll in three easy steps. We don’t charge you each time you run payroll, so you can choose a pay frequency that suits your small business. Get a free trial today!

This article has been updated from its original publication date of August 22, 2018.

This is not intended as legal advice; for more information, pleaseclick here.

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