Understanding Semi Monthly Pay vs Biweekly: Difference, Pros, and Cons

Billpaywiki.com – If you are a fresh graduate, you might be confused about the difference between semi monthly pay vs biweekly. The two seem similar but actually have some slight differences. It’s important to understand both, as it affects the total money that you will get per year.

Among companies from various fields, there’s definitely specific preferences for pay schedule. Some prefer weekly, others choose monthly. The pay schedule is usually matched with the nature of work, cash flows, and other factors of each company.

In this article we try to explain the difference between semi monthly pay vs biweekly pay. Advantages and disadvantages of each system will also be covered.

What Is Semi Monthly Pay?

To put it simply, a semi monthly pay is a type of pay schedule given twice a month. As an employee, your monthly salary is split into two. This system helps workers to spread out the money evenly.

It also offers stability for some those that have problems managing their economy. It will eventually improve their condition, unlike the typical monthly pay. That’s why this pay schedule is often considered as one of the best systems among employees.

How Many Pay Periods in a Year Biweekly? Is it the Same with Semi Monthly?

What Is Biweekly Pay?

Now that we understand semi monthly pay, we should also do the same with biweekly pay. Again, for many people, semi monthly pay vs biweekly sound very similar. After all, don’t we get paid every two weeks with these systems?

Biweekly pay can be described as a pay schedule given every two weeks. Usually, the company chooses a specific day to give their employees their paychecks. It could be Friday for every 2 weeks or Tuesday for every two weeks.

This schedule is not monthly based. It doesn’t care about the change of the months, because it will continue to give the employees their salary per 14 days.

Difference Between Semi Monthly Pay Vs Biweekly

There are some differences between semi monthly pay and biweekly,

  1. Date fixed vs day fixed. Semi monthly pay is given on a specific date. While biweekly pay is given on a specific day. For example, with semi monthly pay schedule, you will be granted your earning in date 1st and 15th. But when the company implements biweekly schedule, your payment will be distributed every Friday per 14 days.
  2. Number of Pay checks per year. With a semi monthly schedule, you will receive 24 paychecks for a whole year. But with a biweekly schedule, you will receive 26 paychecks for 1 year.
  3. Total amount of salary for semi monthly pay vs biweekly. Given that the number of paychecks is different, the total salary is also different. For example, if every paycheck is $3,000, with a semi monthly schedule you will get $72,000 before tax, but with beweekly, you will get $78,000.
  4. Efficiency and Effectiveness. In general, semi monthly schedule is more cost-effective as the employer only needs to pay the workers 2 times a month. However, biweekly schedule is often considered as more efficient because it distributes paychecks on the same day every 2 weeks.

Advantages and Disadvantages of Semi Monthly Pay vs Biweekly

Both semi monthly and biweekly are the most common pay schedules in the United States, with biweekly ranks first. This is because the US has a law that mandates the biweekly pay schedule.

But just like everything that we know, these 2 pay schedules each have its own advantages and disadvantages.

Advantages and Disadvantage of Semi Monthly Pay

Pros Cons
It needs fewer times to process salary thus more cost effective and less time consuming. The number of days for each pay is not consistent. This makes some employees experience difficulty to manage their paycheck.
It’s easier suits a typical business cycle. Semi monthly pay can be difficult for managers who are more familiar with biweekly pay.
It’s easier to calculate benefits and deductions as they usually occur on a monthly basis. Less efficient because unlike biweekly pay, it doesn’t distribute paycheck evenly for every 2 weeks.

Advantages and Disadvantage of Biweekly Pay

Pros Cons
It’s more consistent than semi monthly pay, as employees will receive the exact same of money every 14 days. It needs more times to process salary which make it costlier and more time consuming.
Workers will get 2 more paychecks when we compare semi monthly pay vs biweekly. From the workers perspective, it’s a common knowledge that with biweekly pay, they will likely get lesser salary.
From the employers’ perspective, the biweekly period can make them pay less salary to the workers. Confusing for both workers and employers since people have a habit to think in a monthly period.

Semi Monthly Pay Schedule

If a company use semi monthly pay schedule, the employees will get their pay check 2 times in a month. It’s usually given on fixed dates such as 1st and 15th, 15th and 30th, or even 2nd and 16th. For a whole year, employees will receive their pay checks 24 times.

Biweekly Pay Schedule

If a company use biweekly pay schedule, the employees will get their pay check 1 times in 2 weeks. It’s usually given on fixed day such as Friday, Monday, or any day depending on the company. For a whole year, employees will receive their pay checks 26 times.

How Often Is Semi Monthly Pay?

For semi monthly pay schedule, the company will distribute the pay checks two times in one month. Example, Aaron is a worker for a big tech company. He is promised to get a pay check 2 times every month on day 1st and 15th. This means that the company uses semi monthly schedule.

How Often Is Biweekly Pay?

A biweekly pay schedule means that the pay checks will be granted every 2 weeks. Example, Annie works in a startup company. She receives her pay checks every Monday for every 14 days. This means that Annie works in a company that implements a biweekly pay schedule.

Now, you can see that the system of semi monthly pay vs biweekly is really different. Because Aaron is paid on a date-based system, while Annie is paid on a day-based system.

How Many Semi Monthly Pay Periods In A Year?

Every year, an employee will receive pay checks 24 times if the company uses monthly pay. This is because 1 year consists of 12 months, and each month consists of 4 weeks.

Example, Aaron is paid $2,000 twice a month. His total income for 1 year before tax is $2,000 x 24 = $48,000.

How Many Biweekly Pay Periods In A Year?

For the biweekly pay, employees will receive pay checks 26 times. This is because 1 year consists of 365 days. The total weeks of 365 days is 365/7 and the result is 26.

Example, Annie is paid $1,800 for every 2 weeks. Her total income for 1 year before tax is $1,800 x 26 = $46,800.

With all the explanation above, we can conclude that semi monthly pay vs biweekly offers its own advantages and disadvantages. No system is better than the other. The best way is to choose a system which match with company’s characteristics.

Semi monthly offers a cycle match with business period. However, this system is less consistent as the period between pay checks is not always the same. Biweekly pay is more consistent because each earning is given every 14 days, but it doesn’t match with people’s habit to think and work in monthly cycle. The most important thing is to understand both semi monthly pay vs biweekly thoroughly so that we can utilize them in a better way.

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