Managing payroll effectively is crucial for businesses of all sizes. One common payroll schedule is semi-monthly payroll, but many employers and employees alike wonder how it works and whether it’s the right choice for their company. In this guide, we’ll break down everything you need to know about semi-monthly payroll and how NetPEO can help streamline your payroll processes.

Understanding Semi Monthly Payroll

Semi-monthly payroll is a pay schedule where employees receive their wages twice a month. Typically, companies issue paychecks on the 1st and the 15th or the 15th and the last day of the month. Unlike bi-weekly payroll (which occurs every two weeks and results in 26 pay periods per year), semi-monthly payroll has 24 pay periods annually.

How Semi-Monthly Payroll Works

With a semi-monthly payroll schedule:

Employees receive two paychecks per month, regardless of how many weeks are in that month.
Paydays are fixed on specific dates (e.g., the 15th and 30th).
Salaried employees often find it easier to budget since payments align with monthly expenses like rent and utilities.
Hourly employees may have varying paycheck amounts, depending on the number of workdays in each pay period.

Advantages of Semi-Monthly Payroll

Predictability for Employees – Employees know exactly when to expect their paychecks, which helps them manage personal finances better.
Fewer Payroll Processing Costs – Since payroll is processed only 24 times a year instead of 26 (as with bi-weekly payroll), businesses can save on administrative costs.
Easier Payroll Tax Calculations – Monthly tax calculations are simpler because payroll dates align more closely with calendar months.
Better Alignment with Benefits and Deductions – Benefit deductions (such as health insurance) are often calculated on a monthly basis, making semi-monthly payroll easier to manage.

Challenges of Semi-Monthly Payroll

Inconsistent Paydays – Unlike a bi-weekly payroll schedule that always falls on the same day of the week, semi-monthly payroll paydays vary, which may cause confusion.
Complex Overtime Calculations – For hourly employees, overtime calculations can be more complicated because each pay period may contain a different number of workdays.
Holiday and Weekend Adjustments – If payday falls on a holiday or weekend, businesses must decide whether to pay early, delay payment, or adjust processing times accordingly.

Is Semi-Monthly Payroll Right for Your Business?

Choosing the right payroll schedule depends on your business structure, employee preferences, and payroll processing capabilities. If you have a mix of salaried and hourly employees, or if you want to simplify monthly tax and benefit calculations, semi-monthly payroll could be a great option.

However, the administrative complexity of managing semi-monthly payroll—especially for hourly workers—can be a challenge for some businesses. That’s where outsourcing payroll to an experienced provider like NetPEO can make a significant difference.

How NetPEO Can Help

At NetPEO, we specialize in helping businesses manage payroll efficiently and accurately. Our payroll solutions include:

Automated payroll processing for all schedules, including semi-monthly, bi-weekly, and weekly payroll.
Accurate tax filings and compliance management.
Seamless integration with HR and benefits administration.
Customizable payroll solutions tailored to your business needs.

Get Expert Payroll Support Today

If you’re considering semi-monthly payroll but want to simplify the process, NetPEO can help. Our team of payroll experts will handle all the details, ensuring accuracy, compliance, and efficiency so you can focus on growing your business.

What Is Semi Monthly Payroll? A Guide for Employers