January 28, 2025

Semi-Monthly vs. Biweekly Pay: The Differences Explained

Adaptability is a key trait in employees. Work can be unpredictable, and having team members who can think on their feet when the unexpected happens is invaluable. But while flexibility is important, your employees should never have to question: which day they get paid.

When it comes to payroll, employers have the flexibility to choose from several pay period options, including monthly, semi-monthly, or biweekly payroll schedules. Semi-monthly and biweekly payroll schedules are among the most popular, but understanding the difference can be a little confusing.

Here’s an employer guide to the differences between semi-monthly versus biweekly pay and the pros and cons of each to help you choose the right pay schedule for your business and workforce. Explore how each option impacts everything from cash flow management to employee financial wellness.

Common payroll structures

Here’s how typical payroll structures work.

What is monthly payroll?

A monthly payroll schedule pays employees once a month. Some organizations schedule a set payday, like the last day of the month, or a specific date, like the 15th. Under this payroll schedule, employees receive 12 paychecks per year, regardless of how many days are in the month.

What is semi-monthly pay?

A semi-monthly payroll schedule pays employees two times a month, giving them a total of 24 paychecks a year. Typically, paydays are fixed, like on the 1st, 15th, or last day of the month.

What is biweekly pay?

Biweekly payroll issues paychecks every other week, usually on a specific day of the week. For example, Friday paydays mean workers receive paychecks every other Friday. How many paychecks in a year does that add up to? Since some months span five weeks, this pay frequency equals a total of 26 paychecks a year.

Monthly versus semi-monthly versus biweekly payroll: Key differences

Not sure which payroll schedule is best for your business and employees? Here are key distinctions to consider:

Number of paychecks. Depending on the payroll frequency, employees receive 12, 24, or 26 paychecks annually.
Paycheck size. The dollar amount on each paycheck gets progressively smaller as pay periods become more frequent.
Employee budgeting. Monthly paychecks can create budgeting challenges for employees because they need to manage their expenses over longer periods. Semi-monthly and biweekly paychecks give more frequent access to income, which is helpful for covering fixed monthly costs and unpredictable expenses.
Payroll administration. Simply put, fewer pay periods means you spend less time processing. Whether you perform payroll in-house or use a third-party payroll service, more frequent payroll processing means extra overhead (like transaction fees and administrative costs) and oversight.

Pros and cons of monthly pay schedules

A monthly pay period offers many advantages to employers, especially small businesses with limited resources or budgets. For employees, this type of pay schedule can complicate budgeting.

Pros:

Simplified payroll processing. There are fewer payroll runs for the employee, reducing administrative energy and costs.
Predictable cash flow. Employers can better manage cash flow since they only need to set aside funds for payroll once a month.
Ideal for freelancers. Monthly payroll is well-suited for independent contractors because they often work on a project or retainer basis with monthly invoices.

Cons:

Delayed payments: Any delays in processing create significant financial challenges for workers.
Lower motivation. Monthly pay schedules might reduce employee motivation, as they have to wait longer for a direct deposit to hit.
Stressful for employees. Less frequent paychecks can lead to budgeting challenges, increased financial stress, and difficulty covering unexpected costs.

Pros and cons of semi-monthly payroll

Semi-monthly pay schedules strike a balance with a pay frequency that keeps administrative efforts consistent and paychecks more regular.

Pros:

Easy to understand. Employees know exactly when to expect their next paychecks. Knowing that payday is on the 15th and last day of the month, for example, provides consistency and peace of mind.
Aligns with business cycles. Many organizations invoice clients and customers on the 1st and 15th of the month. A semi-monthly pay schedule aligns with these pay schedules, creating a consistent cash flow.
Fewer pay periods. Semi-monthly payroll has 24 pay periods per year (compared to 26 in a bi-weekly schedule). The reduced pay frequency simplifies the payroll process and strikes a balance for employees who want to get paid more frequently.

Cons:

Difficult to predict. These 15-day pay periods can make it difficult for hourly workers to calculate the size of their paychecks. Weekends, holidays, and work schedules mean hours worked fluctuate from one pay period to the next.
Financial planning. For hourly workers, inconsistent paycheck amounts make it harder to plan finances and anticipate regular income.
More complex for payroll teams. Pay periods don’t align perfectly with the calendar month, which adds complexity to calculating pay. Add factors like overtime, deductions, and vacation hours, and it can be a big administrative headache, especially for large workforces.

Pros and cons of biweekly payroll

Biweekly pay periods are among the most common payroll structures, offering a frequent payday for employees. However, they present some challenges for HR.

Pros:

More paychecks. There are 26 biweekly pay periods in a year. For many employees, that pay frequency can be an attractive work benefit. Regular paychecks improve cash flow and help manage monthly expenses with more ease.
Consistent payday budgeting. Since employees are paid on the same day every other week, payroll knows exactly how much to budget. For salaried workers, it’s straightforward — simply divide the annual salary by 26 pay periods. Although hourly workers aren’t as straightforward, the more predictable pay schedule still helps with budgeting.

Cons:

More frequent payroll processing. With 26 pay periods per year, biweekly payroll schedules require more administrative effort. This means more time and resources and, most likely, overall higher costs for payroll processing.
Smaller individual paychecks. The other side of the coin of frequent pay dates is smaller paychecks. For some employees, fixed monthly expenses (like rent and mortgage payments) might quickly drain the first paycheck of the month.

Choosing between semi-monthly versus biweekly payroll

Ultimately, the pay period you choose for your business boils down to time, resources, and what makes your employees happy.

Before you settle on semi-monthly or biweekly pay schedules, check with your state Department of Labor. Every state has unique laws and regulations about pay periods. For example, North Carolina allows daily, weekly, biweekly, semi-monthly, and monthly pay schedules, whereas California and Michigan have specific payday regulations depending on the occupation.

Give your workforce more flexible pay access

Whether you choose to pay every two weeks or once a month, some employees need access to their money sooner. EarnIn’s Earned Wage Access¹ solution can help.

By providing on-demand access to a portion of their pay¹, employers can help workers better manage their finances and unexpected expenses. Employees can access their pay the same day they work, starting at $2.99 per transfer to their bank account, with the ability to withdraw up to $150 per day and with a max of $750 between paydays. This flexible solution offers significant benefits without additional business costs or complex integration for employers. Learn more about EarnIn for Business today.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out.

A pay period is the time between your paychecks, such as weekly, biweekly, or monthly. EarnIn determines your daily and pay period limits (“Daily Max” and “Pay Period Max”) based on your income and financial risk factors as outlined in the Cash Out Maxes section of our Cash Out User Agreement. EarnIn reserves the right to adjust the Daily Max and Pay Period Max at its discretion. Your actual Daily Max will be displayed in your EarnIn account before each Cash Out.

EarnIn does not charge interest on Cash Outs or mandatory fees for standard transfers, which usually take 1–2 business days. For faster transfers, you can choose the Lightning Speed option and pay a fee to receive funds within 30 minutes. Lightning Speed is not available in all states. Restrictions and terms apply; see the Lightning Speed Fee Table and Cash Out User Agreement for details and eligibility requirements. Tips are optional and do not affect the quality or availability of services.