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Difference between Semi-Monthly and Bi-Weekly Paycheck

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The pay period is the period of time that you collect pay for or how often you pay your employees.  The normal pay periods are:

  • Monthly
  • Semi-Monthly
  • Biweekly
  • Weekly
  • Daily

Quarterly and Annual are used occasionally in very special circumstances.  In most cases, you are required to pay at least monthly and, in some cases, more often than that.  Here is a link to a chart showing the state by state requirements for pay frequency.  https://www.dol.gov/whd/state/payday.htm

We recommend where possible that you pay on a biweekly basis.

Monthly is not available in many cases for employees that are subject to overtime provisions of the FLSA or the states.

Semi-monthly makes overtime difficult to calculate because the workweek for determining overtime does not coincide with the pay period, which may require you to go back and forth between pay periods to calculate overtime.

Biweekly should be two full work weeks.  You can calculate any overtime in each workweek and include it all on the payment for that pay period.  It cuts down the number of payrolls you have to run from 52 if weekly to 26. It may well cut down on the number of deposits you have to make to the government.  It helps improve cash flow for the business.  It is well accepted in most industries.  It is a good balance between cost and convenience.

To learn more, we recommend reading The Payroll Book: A Guide for Small Business and Startups

 

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