Biweekly vs. Semimonthly Pay: Key Differences and How to Choose

When is payday? For employees, the answer is a core component of any job. Even those who are passionate about their work still care about financial security. For employers, payday is just as crucial, impacting both their administrative operations and relationships with employees. Issues swirling around payday or payroll processes can lead to employee distrust. 

To get to the right answer, HR teams and compensation professionals must ask themselves a fundamental question: Will we choose a biweekly or semimonthly pay schedule? Here’s what to know about the difference between biweekly and semimonthly pay schedules, along with the pros and cons of each. 

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What are biweekly and semimonthly pay schedules?

At first glance, the difference between biweekly and semimonthly might seem subtle. But, when it involves pay frequency, the impact is significant.

Here’s a breakdown of the key differences between the two options: 

Biweekly pay: Employees are paid every two weeks on a fixed day, such as every other Friday. That makes for 26 pay periods per year. 

Semimonthly pay: Employees are paid twice per month, typically on the 1st and 15th or 15th and the last day of the month. In this scenario, payday comes 24 times a year. 

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What are key differences between biweekly and semimonthly pay?

Biweekly pay is the clear preference for many employers. According to a February 2023 report from the US Bureau of Labor Statistics, 43% of private employers paid their employees every two weeks. About 20% chose the semimonthly payroll, 27% chose weekly, and about 10% chose monthly. 

But the right choice for a particular organization will depend on the needs of its workforce and HR team. Here are the pros and cons of biweekly and semimonthly pay cycles. 

1. Payroll Processing Complexity

Incorporating deductions and overtime as part of payroll can get complicated. When making the choice, HR teams must consider their team’s capacity to process either option. 

Processing Considerations for Biweekly Pay 

When employees are paid on a fixed day of the week — such as every other Friday — calculating overtime becomes easier because the pay period typically spans two full workweeks. For HR teams, processing payroll is also simpler as it occurs on fixed days each month. For example, if payday is every other Friday, the HR team can designate every other Tuesday to run payroll.

“It is the same day every two weeks,” said Shannon Curtis, a senior human resources business partner for HR consulting firm Employers Advantage. “So there’s some consistency in when those payrolls are run.” 

Employers have that extra expense during the month, not only for processing payroll, but for paying the payroll.

However, with a biweekly pay frequency, an employer will need to cover 26 different pay periods in a year. That means, across a couple months, they’ll need to handle three different pay periods instead of two, noted Courtney Berg, president of HR consulting firm CourtSide Consulting. With those two extra pay periods annually, HR and compensation teams face more work and potentially higher processing costs with a payroll provider. Cash flow within the organization may be a consideration.

“Employers have that extra expense during the month, not only for processing payroll, but for paying the payroll,” Berg said. “All of a sudden, in those months, if they have a $10,000 payroll or a $20,0000 payroll, they have to come up with that extra $10,000 or $20,000 that month to make that payroll.” 

Processing Considerations for Semimonthly Pay

With a semimonthly schedule that covers just 24 pay periods, organizations can save on administrative work and payroll processing fees. “It’s cheaper for them,” Berg said.

But, especially for companies with hourly employees, the math required to calculate pay can become unwieldy. Because paydays will fall on a different day of the week each month, pay periods often don’t align with standard workweeks. Calculating a paycheck will require accounting for irregular work hours and prorating partial pay periods. “That can definitely impact your planning,” Berg explained. 

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2. Impact on Employee Budgeting

Thoughtful consideration of employees’ needs is also critical as organizations decide between biweekly or semimonthly pay periods. Keep these issues in mind as you decide: 

Budgeting Considerations for Biweekly Pay

When employees are paid every other week on a specific day — for example, every other Friday — they benefit from regular, predictable biweekly paychecks. This payment schedule is particularly popular with hourly, or non-exempt, workers because paydays fall on the same weekday every other week.

And, with 26 pay periods a year, paydays will come more frequently, which may make it easier for some workers to cover incidental daily expenses such as groceries or gas, said Annette Harris, an HR professional and owner of Harris Financial Coaching.

What’s more, one of those additional paychecks often comes at the end of the year around the holidays, Harris noted. Some employers even prorate benefit deductions throughout the year so they aren’t deducted from the final paycheck of the year, making it slightly larger.

“They’ve already paid for their deductions between January and the first part of December," Harris said. “So that last paycheck of the year, they have extra funds in their pocket and that helps them out during the holiday time.” 

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Budgeting Considerations for Semimonthly Pay

With a semimonthly payroll schedule, the two paydays can fall on any day of the week, and that can make budgeting more complex, especially for workers who live paycheck to paycheck.

I’ve seen companies do it both ways — salaried employees get semimonthly, hourly employees get biweekly.

“What you find is that with semimonthly, people lose track of when they’re getting paid,” Berg said. “They have a harder time than with biweekly.” 

Salaried employees, however, may prefer the semimonthly option, which results in larger paychecks split across fewer pay periods. That schedule may better align with their fixed monthly expenses, such as a mortgage or car payment. “I’ve seen companies do it both ways — salaried employees get semimonthly, hourly employees get biweekly,” Berg said. 

3. Compliance Considerations

As employers consider their pay schedule, they should also consider applicable federal and state laws. Federal law doesn’t mandate when employees are paid, according to payroll processing firm ADP. But rules can vary by state. For example, in Wisconsin, most employers must pay workers all wages earned at least monthly, ensuring no more than 31 days pass between pay periods, according to a US Department of Labor chart of pay frequency requirements. However, some workers are exempted from that rule, such as loggers and farm laborers who can be paid quarterly. And in Utah, salaried employees can be paid monthly. 

As they determine payroll frequency, organizations also should understand the overtime pay requirements in the states where they operate to ensure compliance. Those also can vary. Federal law requires that non-exempt workers covered by the Fair Labor Standards Act earn overtime for work beyond 40 hours in a workweek. But employees in Colorado earn overtime for any work in excess of 40 hours per workweek, 12 hours per workday, or 12 consecutive hours without regard to the starting and ending time. 

“You've got to be thinking about the pay week and the overtime and when everybody's getting paid, and making sure that those time calculations are accurate,” Berg said. 

Choosing the Right Pay Schedule for Your Business

As organizations decide what pay schedule is right for their business, they’ll need to consider workforce composition, such as the number of hourly and salaried employees, and the organization's budget and administrative capacity. Here are some questions for HR teams and business owners to ask.

1. Is your workforce mostly hourly workers? 

If your workforce is made up of mostly hourly workers, biweekly pay periods may make the most sense. With 26 paydays, employees have money coming in more frequently, and it also can benefit new employees who may need cash more quickly.

“Hourly tends to be set up in arrears because you want to capture all hours worked,” Curtis said. “So if you have hourly staff on a biweekly schedule, they have to wait less for that first paycheck. Whereas on a semimonthly schedule, if it's a month with 31 days, they may have to wait longer for that check.”

2. What is the industry standard? 

Organizations are competing for the best workers, and any pay frequency decision should consider what your competitors are doing. If an employer’s workforce is composed mostly of hourly workers, but payday is semimonthly, job candidates may look elsewhere because they prefer the predictability of a biweekly payroll.

In some cases, even a weekly pay schedule may be best, Curtis said. “I do payroll for some warehouses, with more manual labor and high turnover, and they pay weekly, because that's more common in what their population of employees are more used to and prefer.”

What can my staff sustain? What's the administrative burden I'm willing to take on?

3. What is the capacity of your team? 

An already overworked HR team may benefit from the savings of a semimonthly pay schedule because it requires two fewer pay dates. Ask yourself, Curtis advised: “What can my staff sustain? What's the administrative burden I'm willing to take on? And do we have the people available to take those on?” 

How Lattice Payroll Simplifies Pay Schedules

Processing payroll can get complicated, especially as teams juggle any number of metrics, including different deduction options, overtime, and compliance requirements. But payroll systems are increasingly simplifying the work.

Lattice Payroll, for example, is a comprehensive payroll software solution that can support both biweekly and semimonthly pay cycles. It’s designed to automate payroll processing, including overtime calculations and deductions. It ensures compliance with federal and state wage laws. It also provides employees with clear pay statements for budgeting and planning.

And it does all that seamlessly, connecting performance reviews and compensation discussions to ensure every payday is on time and error-free.

Ready to take the hassle out of payroll and streamline payday processes in your organization? Schedule a demo of Lattice Payroll to see how it supports different pay schedules and simplifies payroll management.