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What is the Difference Between Semimonthly and Biweekly Payroll?

Difference Between Semimonthly and Biweekly Payroll

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Difference Between Semimonthly and Biweekly Payroll

“Semimonthly” and “biweekly” are both pay frequencies, but they have different intervals:

  • Semimonthly Payroll:
    If a company runs a semimonthly payroll, employees are paid twice per month, typically on set dates. For example, employees might receive their paychecks on the 15th and the last day of each month. This results in a total of 24 pay periods in a year.
    Semimonthly payroll can result in slightly more complex calculations for hourly employees if the pay periods do not align exactly with the weeks. It can also lead to variation in paycheck amounts if the number of workdays in each half of the month is not equal.
  • Biweekly Payroll:
    On a biweekly payroll schedule, employees are paid every two weeks, typically on a specific day of the week. For example, employees might receive their paychecks every other Friday. This results in a total of 26 pay periods in a year (since a year has 52 weeks).
    Biweekly payroll can be simpler to calculate for hourly employees as it aligns exactly with weeks, and the number of workdays in a pay period is typically consistent. However, the dates of payment can shift over time due to the extra two pay periods compared to monthly or semimonthly payrolls.

In summary, the main difference between semimonthly and biweekly payroll is the frequency of pay periods: semimonthly results in 24 pay periods per year, whereas biweekly results in 26 pay periods per year. The choice between these two can depend on various factors, including business needs, payroll costs, administrative complexity, and employee preferences.

Example of the Difference Between Semimonthly and Biweekly Payroll

Let’s use hypothetical examples to illustrate the difference between semimonthly and biweekly payroll:

Example of Semimonthly Payroll:

Alex is a salaried employee at a tech company, and his annual salary is $48,000. The company operates on a semimonthly payroll schedule, which means Alex gets paid twice a month, or 24 times a year.

To determine his paycheck amount, the company divides his annual salary by the 24 pay periods: $48,000 / 24 = $2,000. So, Alex receives a paycheck of $2,000 on the 15th and the last day of each month.

Example of Biweekly Payroll:

Now consider Bella, who works for a marketing firm and also earns an annual salary of $48,000. However, Bella’s company runs on a biweekly payroll schedule, which means Bella gets paid every two weeks, or 26 times a year.

To calculate her paycheck amount, the company divides her annual salary by the 26 pay periods: $48,000 / 26 = $1,846.15. So, Bella receives a paycheck of approximately $1,846.15 every other week, typically on a set day like Friday.

These examples illustrate how the frequency of payroll can affect the amount of each paycheck. While Alex and Bella earn the same annual salary, Alex’s individual paychecks are larger because he is paid less frequently (24 times a year versus Bella’s 26).

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