When running a business, employers use several pay periods to pay employees. Besides monthly payments, bi-weekly and semi-monthly pay periods are quite common in the labor market.

Most times, people get confused about the bi-weekly and semi-monthly pay periods. Each pay period has peculiar features, benefits, and drawbacks. This article tells you the difference in bi-weekly vs. semi-monthly pay periods. We will also show you how to choose between the two.

What is the Difference Between Semi-Monthly and Biweekly Pay

Semi-monthly vs Bi-weekly pay periods

The main difference between semi-monthly and bi-weekly pay is the number of pay periods in a year. Semi-monthly pay occurs twice a month on fixed dates, while bi-weekly pay occurs every other week. Below are some distinct features of both payment schedules.

  • Number of Paychecks Per Year

In a semi-monthly pay period, employees get a total of 24 paychecks annually. However, with a bi-weekly payment, the total number of checks employees receive is 26. This is because there are months when they’ll be paid three times.  

Since the semi-monthly payment is twice a month, the total pay is 24. With a bi-weekly payment, though, the payments are usually two weeks apart. Therefore, there are instances where there may be three schedules within one month.

  • Paycheck Amounts 

Another difference between both pay periods is the payment amounts. Typically, semi-monthly paycheck amounts are higher than bi-weekly amounts. This is because the former happens less frequently than the latter. However, the two extra paychecks in a bi-weekly pay period cover this gap. So, it totals 26 instead of 24 per year.  

  • Payday

The payday for a semi-monthly pay period happens twice a month on a fixed date. Depending on the company, it could be on the 15th and 30th of each month. It could also be on the 1st and 15th of the month. In a bi-weekly payment, payday is on a particular day of the week and happens every other week on that day. 

So, employers roll out semi-monthly paychecks twice on specific dates, no matter the weekday. Meanwhile, bi-weekly paychecks are rolled out two weeks apart on a particular day of the week, for example, on a Friday.  

  • Calculation of Salary

The total number of annual paychecks for semi-monthly and bi-weekly pay periods differ. So, the salary calculation will vary. Full Time employees who receive a salary must divide the number of working hours by the total pay periods in a year. This figure represents the number of hours you’ll be paid per pay period. 

So, let’s assume the total working hours in a company for a year is 2,040. The semi-monthly pay will be 85 hours per pay period (2040/24). On the other hand, bi-weekly pay will be 78.5 hours per pay period (2040/26). You can use our labor cost calculator to get accurate results if you find it confusing.

How to Choose Between Bi-Weekly & Semi-Monthly Pay

Some state laws prescribe payment schedules to employers. However, if the law allows you to choose, you should weigh the pros and cons to see which favors you.

  • Advantages of Getting Paid Bi-Weekly

Getting bi-weekly pay helps employees with budgeting. You can easily budget when you receive bi-weekly pay because you can predict the payday. It also helps with consistency because the payday remains the same every month. Also, annual bi-weekly payments total 26 pay periods, so you receive more paychecks in a year. 

  • Advantages of Getting Paid Semi-Monthly

Getting semi-monthly pay allows you to split expenses across the month. It also makes salary deductions easy to expect and process. Semi-monthly schedules have fixed dates, so you can manage bills with those dates in mind. No matter the day it falls, you will receive your payment. Also, the salary deduction remains constant when you get paid twice a month. This makes it easy to calculate your salary.

  • Disadvantages of Getting Paid Bi-Weekly 

With bi-weekly pay, there are more paychecks, making processing more tedious. Bookkeeping can be complicated because of the extra paychecks each year. Also, the paycheck amounts for bi-weekly payments are smaller, and there are salary deductions for each. Therefore, it may be hard to calculate gross monthly income from a biweekly pay stub. 

  • Disadvantages of Getting Paid Semi-Monthly

Semi-monthly payments may not be a good option for hourly employees. This is because it is difficult to calculate overtime and work hours. Also, when payday is on a weekend or holiday, you’ll wait until the next business day to process. 

  • Is Biweekly or Semimonthly Pay Better? 

Choosing a pay period depends on your preferences and the nature of your job. To decide which is best, consider the features of each pay period. For example, for hourly employers, we recommend bi-weekly pay. In contrast, we recommend the semi-monthly system for full-time salary employees. Ultimately, you have to choose what suits your budget and lifestyle. 

Which Pay Schedule is More Common and Why? 

Bi-weekly vs Semi-monthly pay periods

In 2019, the Bureau of Labor Statistics said the bi-weekly pay schedule would be more common. From the data, 42.2% of companies run bi-weekly pay, while 18.6% are semi-monthly. Employers may choose bi-weekly pay because they only process paychecks once every two weeks. For employees, it increases their cash flow and frequency.

Other Pay Schedules

Employers use four pay schedules: weekly, bi-weekly, semi-monthly, and monthly. 

With weekly pay periods, the employers pay based on the weekly work hours. With the monthly payment, employees receive their salary once a month. Usually, payment dates are always specified in these arrangements. The pay period that an employer or employee chooses may vary from industry to industry. 

Final Thoughts on Semi-monthly & Bi-weekly Pay Periods

The semi-monthly and biweekly pay periods are distinct from each other. From paycheck amount to payment frequency, each pay period has benefits and drawbacks. To know which is best for you, consider what they offer and how it applies. While the semi-monthly pay has a fixed payment date, the bi-weekly has a fixed payment day. So, choosing one depends on your calculations and industry. 

Frequently Asked Questions

The following are some questions people often ask about pay periods.

What is a pay schedule? 

A pay schedule is the frequency and date an employee receives his salary. For example, suppose an employer pays semi-monthly and pays on the 1st and 15th. Then, the schedule is the frequency (semi-monthly) and the pay date (Every 1st and 15th.)

How many semi-monthly pay periods in a year?

Employees get paid twice a month on a fixed date for semi-monthly pay periods. This may be on the 1st and 15th or the 15th and 30th of every month. So, the total semi-monthly pay periods in a year will be 24. 

Which pay schedules do different industries use? 

Industries have the liberty to choose between four pay schedules. They include weekly, bi-weekly, semi-monthly, and monthly payments. The weekly pay is at the end of every week, while the bi-weekly pay is once every two weeks. Also, the semi-monthly pay occurs twice a month on a specific date. Meanwhile, the monthly pay occurs once a month on a specific date too.