Are you curious whether you should integrate bi-weekly, bi-monthly, or semi-monthly payments for your e-commerce business? Read on to learn how these options can attract more customers by offering flexibility and offer long-term success for your business. Traditional monthly payment cycles may not always align with the dynamic nature of e-commerce businesses, where expenses and revenues can fluctuate rapidly. To address this issue, many companies turn to alternative schedules, such as bi-weekly, semi-monthly, or bi-monthly payments, to manage their cash flow better.

Also, if a semi-monthly payday lands on a weekend or holiday, plans will need to be made in order to pay employees either before or after the break in the week. If you want to keep your budget consistent and put the same amount of money into payroll each month, a semi-monthly payment model would be a no-brainer. Just be sure to keep your employees updated on any advanced or delayed payments you will be making and everything will be just fine.

What Is a Semi-monthly Payroll?

The one downside to biweekly payments is the inconsistency in how much money you are paying out each month. There will always be a couple of months where https://www.bookstime.com/ you will have three paydays instead of two. It will be up to you and your accountant to make sure you will have enough to cover the extra payout.

For many companies, it is mostly every other Friday, regardless of the month. This strategy is more common among employees who get paid on an hourly basis. Therefore, calculating what an employer needs to pay an employee by payday can be calculated by dividing 2080 hours by the total number of pay periods for a semi-monthly employee, 24.

Semi-Monthly vs Bi-Weekly: What’s the Difference?

There are two commonly used pay schedules – semi-monthly and bi-monthly. According to the Bureau of Labor Statistics, 36.5 percent of employees are paid biweekly. Receiving up to two additional paychecks per month compared to a semi-monthly pay schedule is certainly a bonus for employees. For months where additional planning was not put in place, a small business semi monthly vs bi weekly may not have sufficient funds for a three paycheck month compared to a two paycheck month. The bi-monthly payment is ideal from the standpoint of worker relations because employees get used to receiving pay about twice a month and get two additional “free” paychecks a year. Additionally, it is simpler for staff to plan for money receipts every other Friday.

In the most practical terms, that means employees who are paid bi-weekly receive more paychecks than employees who are paid semi-monthly. This is an important consideration for workers who would rather get paid more often. If you’re looking for more, we created this handy table showing the pay dates for bi-weekly and bi-monthly pay. Because the payroll is processed fewer times for semimonthly frequencies than biweekly, employees’ paychecks will be greater. Biweekly paychecks will be be for less money, but employees will receive the two additional paychecks to make up the difference. If you are a salaried employee, the payment schedule you receive may not change the amount you’re paid each paycheck.