Further, it is easier for employees to budget for cash receipts every other Friday, rather than receipts that may be accelerated or delayed by the presence of weekends and holidays. From an organizational perspective, it is somewhat easier for the payroll staff to prepare a biweekly payroll, since processing steps always take place on the same day of each week unless holidays interfere.
When a semimonthly payroll is used, processing steps constantly shift around among different days of the week, since the pay date is not fixed on a specific day of the week. Some organizations settle upon a combination of payrolls, using the semimonthly approach for salaried workers and a biweekly payroll for hourly employees. From an efficiency perspective, the main point is to avoid weekly payrolls in favor of either of the methods presented here, thereby cutting the total number of payrolls in half.
Accounting Books. Buying Guide Our team at The Usage has selected the best planner of Learn More About biweekly. Time Traveler for biweekly The first known use of biweekly was in See more words from the same year. From the Editors at Merriam-Webster. Style: MLA. Get Word of the Day daily email!
Test Your Vocabulary. Test your visual vocabulary with our question challenge! Love words? Need even more definitions? Just between us: it's complicated. Ask the Editors 'Everyday' vs. What Is 'Semantic Bleaching'? How 'literally' can mean "figuratively". Literally How to use a word that literally drives some pe For example, a company might pay its employees on the 15th and 30th of every month.
Semimonthly pay results in 24 paychecks instead of 26 for biweekly pay. The paychecks are slightly higher to compensate for receiving fewer of them throughout the year. Semimonthly paydays mean you get paid more per paycheck, but there are fewer paychecks. Biweekly paydays mean you get less on each paycheck, but you have more paydays. You can also apply this same idea if you're hourly, as long as you factor in any overtime hours you work during a pay cycle.
Read more: Semimonthly vs. A small disadvantage to biweekly pay is the ability to accurately calculate your take-home pay. When you get paid semimonthly, your paycheck is evenly divided twice, making it easier to factor in deductions like taxes and benefits. Since you receive two extra paychecks per year on a biweekly cycle, there are two months when you need to perform some extra calculations to find your take-home pay.
However, you can use online resources to help you make any additional calculations for your paycheck. Companies ultimately choose pay cycles based on what works best for them. In addition to biweekly and semimonthly pay cycles, businesses could also choose to pay employees weekly or monthly. For weekly pay, you get a paycheck on the same day every week, such as every Friday. You would get 52 smaller paychecks per year.
For monthly pay, employers usually distribute pay on the 1st of every month, meaning you would get 12 larger paychecks per year. When choosing the pay cycle, employers need to account for a few factors, including:. Some payroll software providers charge companies each time they process a pay cycle.
If a company uses this type of software, it may be more likely to pay employees semimonthly since processing two fewer paychecks per year would save the company money. Although not as common, an employer could also distribute paychecks once per month. Employers need to carefully budget their expenses to make a profit, including payroll.
Since biweekly pay is typically more consistent than semimonthly pay, they may be more likely to use it to help budget. Another important idea employers consider is how employees feel about the pay cycle.
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