Bi-weekly vs. semi-monthly pay explained

Growing up where I'm from, most people were on a bi-weekly pay schedule.

If you asked your mom for something—whether it be an RC car or the latest video game, and you were hit with a: "You're gonna have to wait 'till next Friday" then you knew there was a chance.

It was confusing, but sometimes that's the price you have to pay for a Yu-gi-oh starter pack.

As you got older, you started to realize the best times to ask for extra cash—right when that sweet, sweet paycheck came in every two weeks.

And this is how I learned about the bi-weekly pay schedule.

What is the difference between bi-weekly pay and semi-monthly pay?

Bi-weekly simply means every two weeks and semi-monthly means two times a month.

But if some months have four weeks, wouldn't that mean these are the same?

This is a common misconception, but no—because some months have more than four weeks, a bi-weekly and semi-monthly payroll frequency aren't quite the same.

Semi-monthly payroll vs bi-weekly payroll: The pay frequency breakdown

With a bi-weekly pay period, you get paid every two weeks. With 52 weeks in a year, this equates to 26 paychecks.

For those paid semi-monthly, you get paid twice a month. With 12 months in a year, this comes to 24 paychecks a year.

A bi-weekly pay schedule usually means your paycheck comes every other Friday (or whatever day of the week your payroll is issued).

Those who are paid semi-monthly typically see their paychecks arrive on the first and fifteenth (or the fifteenth and thirtieth/thirty-first) of every month, as long as those days fall on a business day. If not, it will be received the Monday after or the Friday before.

What are the pros and cons of semi-monthly vs bi-weekly pay?

These pay periods may seem quite similar, which is true for the most part but you may still have some questions.

As an employee, is one better than the other?

How about as an employer?

Why are they so similar but not the same?

These are all valid questions. Let's quickly break them down.

As an employee, one of these pay periods isn't technically better than the other. You won't make more or get taxed less by choosing one or the other. However, some people do have personal preferences on these pay frequencies.

Pay frequency preferences for employees

Some people do prefer being paid bi-weekly simply because it means more paychecks.

If you can find a good monthly budget that works for you using bi-weekly paychecks, then those two extra pay periods and months with three paychecks can feel like a very nice bonus.

A bi-weekly pay schedule also means consistency in the days of the week you are paid, which can make certain financial situations a little bit easier.

When it comes to semi-monthly pay, you don't get paid more but your paychecks will be slightly bigger. While semi-monthly pay won't be consistent in the days of the week that you're paid, it will offer consistency in the day of the month, assuming payday falls on a business day.

Getting your paycheck on the same day every month can make aligning your bills with your pay much easier.

Pay frequency preferences for employers

In a perfect world, employees would be able to choose a pay cycle that works best for them, or better yet, simply let them get paid whenever they need it.

But the real reason employers run payroll with a certain pay frequency is slightly more complex than that.

The reality is that running a payroll, whether it be a bi-weekly payroll or semi-monthly payroll, takes a lot of time and energy.

On the employee's end, you simply receive a check each pay period or have money deposited directly into your account. This may seem extremely straightforward but the reality is that there's actually a lot of work that goes on in the background to pay employees.

So, if these two options are so similar, what's the difference for employers that run payroll?

How hourly workers and salaried workers come into play

The main difference is the level of effort each option puts on those who run payroll.

Hourly employees are usually paid bi-weekly because tracking their hours on a weekly basis makes it easier to pay employees.

Salaried employees are generally paid semi-monthly because their hours don't need to be tracked as closely and with only 24 pay cycles as opposed to 26 bi-weekly paychecks, it makes less work for your payroll team.

Final Thoughts

When it comes to bi-weekly and semi-monthly pay, the biggest difference for employees is that with semi-monthly pay, you'll get bigger paychecks, whereas with bi-weekly, you'll get two extra paychecks each year.

But don't worry—at the end of the day, take-home pay is the same, the only difference is frequency and size of paycheck.

You won't get to choose one or the other when starting a new job but it's still important to recognize the pros and cons of each side while on the job hunt and why certain employers may prefer certain pay periods over the others.

It's also important to recognize and appreciate the work that goes on behind the scenes for those who run payroll.

If your place of work mainly consists of hourly employees, then operating a bi-weekly payroll will be less of a burden on those who run payroll.

Whereas a business operating with more salaried employees will likely pay employees semi-monthly because there is no need to track weekly hours.