Semi-Monthly Payroll: What It Is, How It Works, and Pros & Cons

Think of semi-monthly payroll as payday showing up twice a month, like clockwork. Employees get paid on two fixed dates, usually the 1st and 15th or 15th and last day of the month. 

That means you’re cutting 24 paychecks a year instead of 26 (like bi-weekly payroll). On paper, fewer pay periods means fewer payroll headaches for you.

Sounds simple, right? Well, there’s a catch. Since months don’t have the same number of days, payday doesn’t always land neatly on the same weekday. 

If the 15th falls on a Saturday? Payday might get bumped to Friday. If the last day of the month is a Sunday? Employees could get paid on Monday instead.

This schedule is great if you want consistency and if your employees like lining up their paychecks with rent, bills, and other monthly expenses. But is it the best option for your team? We’ll break it all down.

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How does semi-monthly payroll work?

So you know semi-monthly payroll means two paychecks a month—but how does it actually work when payday rolls around?

How many paychecks do employees get?

With a semi-monthly schedule, employees get 24 paychecks a year. That’s two per month, every month—no extra checks, no weird "third paycheck" months like with bi-weekly payroll.

‍When do pay periods start and end?

Each pay period usually covers half the month, so:

• 1st–15th → Paid on the 15th (or the closest business day).
• 16th–last day of the month → Paid on the last day of the month (or bumped to the nearest weekday).

Since months aren’t all the same length, these pay periods aren’t always an even 14 or 15 days—which means employees might have slightly different earnings each check if they’re hourly.

What happens if payday falls on a weekend or holiday?

If payday lands on a Saturday or Sunday, most companies pay on the Friday before.

If it’s a holiday, payday might shift to the previous business day—or occasionally the next business day, depending on company policy.

Common semi-monthly pay dates:

• 1st and 15th
• 5th and 20th
• 15th and last day of the month

This schedule works best for businesses that want predictability and for employees who budget around rent and bills. But it also comes with some quirks—especially for hourly workers. More on that next!

Semi-monthly vs. bi-weekly payroll: What’s the difference?

People mix up these pay schedules all the time and, honestly, we get it. Semi-monthly payroll and bi-weekly payroll both mean employees get paid twice a month, except not at the same two times a month. 

The difference matters, especially when it comes to budgeting, payroll processing, and overtime calculations:

• Semi-monthly payroll 
  
  • 24 paychecks per year
  • Common pay dates are the 1st and 15th, or 15th and last day of the month
• Bi-weekly payroll 
  
  • 26 paychecks a year
  • Common pay dates are every other Friday of the month 

Key differences between semi-monthly and bi-weekly payroll

Pay frequency:

• Semi-monthly pay periods are fixed—two per month, every month.
• Bi-weekly payroll follows a strict every-two-weeks rule, which means some months have three paychecks instead of two.

Payday consistency:

• Payday consistency: Bi-weekly paychecks always land on the same day of the week (like every other Friday).
• Semi-monthly paychecks shift around depending on weekends and holidays, since they’re tied to specific dates.

Overtime and hourly wages:

• If you pay hourly workers on a semi-monthly pay schedule, their hours might fluctuate because pay periods don’t always have an even 14 days.
• Bi-weekly payroll makes overtime calculations easier since it always covers exactly two weeks of work.

Which one is better?

It depends. Semi-monthly pay periods work best for salaried employees, especially if you want paydays to line up with rent and bills. But bi-weekly payroll is easier for hourly workers, since it keeps overtime calculations consistent.

Semi-monthly vs. other payroll schedules

Semi-monthly payroll isn’t the only way to pay employees. We’ve explored the main differences between semi-monthly and bi-weekly payroll—but  how does it stack up against other payroll schedules? 

Semi-monthly vs. weekly payroll

• Semi-monthly payroll: 
  
  • 24 paychecks a year
  • Common pay dates: 1st and 15th, or 15th and last day of the month
  • Works well for salaried employees and companies with predictable budgeting
• Bi-weekly payroll:
  
  • 26 paychecks a year
  • Common pay dates: Every other Friday
  • Great for teams with hourly workers
  • It’s also easier to calculate overtime pay 
• Weekly payroll:
  
  • 52 paychecks a year
  • Common pay dates: Every Friday
  • Works well for industries with high turnover or frequent payroll needs (like retail, restaurants, construction)
• Monthly payroll:
  
  • 12 paychecks a year
  • Last day of the month
  • Tends to work well for executive salaries and businesses with low payroll-processing needs

Pros and cons of semi-monthly payroll

Pros of semi-monthly payroll

Consistent paydays

Employees always know when their paycheck is coming—twice a month, no surprises. Whether it’s the 1st and 15th or 15th and last day of the month, they can plan bills and expenses accordingly.

Easier budgeting

For businesses managing cash flow, semi-monthly payroll syncs up with regular expenses like rent, utilities, and vendor payments. That means less stress when it comes to balancing the books.

Fewer payroll runs

Compared to weekly (52 payrolls) or bi-weekly (26 payrolls) schedules, semi-monthly payroll only requires 24 payroll runs a year—saving time, money, and admin headaches.

Salaried employee-friendly

Since semi-monthly pay periods aren’t based on weekly cycles, they’re better suited for salaried employees who earn the same amount each paycheck, no matter how many workdays fall in the pay period.

Cons of semi-monthly payroll

Irregular pay periods

Months aren’t all created equal. Some semi-monthly pay periods stretch 16 days, while others last only 12 or 13 days. That can make calculating hourly wages and overtime trickier than with a fixed bi-weekly payroll schedule.

Can be confusing for hourly workers

Because semi-monthly payroll isn’t based on a strict two-week cycle, hourly employees may struggle to track hours, overtime, or partial pay periods—leading to potential payroll disputes.

Not ideal for businesses with high turnover

Industries with lots of new hires, temp workers, or frequent staffing changes (like retail or hospitality) may find bi-weekly or weekly payroll easier to manage. More frequent pay cycles can help keep employees engaged and reduce turnover.

Is semi-monthly payroll right for your business?

Semi-monthly payroll isn’t one-size-fits-all—it works great for some businesses but can be a logistical nightmare for others. Here’s how to know if it’s a good fit or if you should consider another payroll schedule.

Semi-monthly payroll is best for you if…

Your team is mostly salaried employees.

Salaried workers earn the same paycheck each period, making semi-monthly payroll a seamless, predictable choice. No overtime calculations? Even better.

You want a predictable payroll schedule.

With set paydays (like the 1st and 15th or 15th and last day of the month), you can plan cash flow easily and avoid the extra pay period surprises that come with bi-weekly payroll.

You’re looking to cut payroll processing costs.

Running payroll 24 times a year instead of 26 (bi-weekly) or 52 (weekly) saves money, admin time, and stress. If efficiency matters, semi-monthly might be the way to go.

Semi-monthly payroll might not be the best choice if…

You have a lot of hourly employees.

Since semi-monthly pay periods don’t align perfectly with a weekly schedule, overtime calculations can get tricky. Bi-weekly payroll may be a better option for tracking hours accurately.

Your team prefers Friday paydays.

A lot of employees are used to getting paid every other Friday. Since semi-monthly paydays move around, it might throw off their budgeting. If payday consistency matters, bi-weekly is a safer bet.

You’re in an industry that expects weekly payroll.

If you’re in restaurants, construction, or retail, employees may expect to get paid weekly. In that case, a weekly payroll schedule might be better for retention.

Run payroll without the paperwork

If you're tired of wrestling with payroll math, it’s time to simplify the process. With Homebase Payroll, you can pay every employee in just a few clicks—no calculations, no confusion. 

Whether you opt for semi-monthly payroll, or not, Homebase handles the compliance chaos, so you can focus on what matters most: your team, your customers, and your business.

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Frequently asked questions about semi-monthly payroll

Does semi-monthly payroll mean employees get less money?

Nope! Semi-monthly payroll just spreads out an employee’s annual salary over 24 pay periods instead of 26 (bi-weekly) or 52 (weekly). The total earnings stay the same, but each paycheck is slightly larger compared to a bi-weekly paycheck since there are fewer of them per year.

How does overtime work with semi-monthly payroll?

Overtime pay for semi-monthly payroll can be tricky because pay periods aren’t always exactly 14 days. Some months have longer or shorter pay periods, which means overtime calculations can fluctuate.

• Employers typically track overtime weekly, even with a semi-monthly pay schedule to ensure compliance with labor laws.
• For hourly workers, it’s crucial to define which hours fall into which pay period to ensure accurate overtime payments.

Can hourly employees be paid semi-monthly?

Yes, but it can be confusing. Since semi-monthly pay periods aren’t always the same length, hourly employees may find it harder to track their hours and overtime. 

Most businesses with hourly employees prefer bi-weekly payroll because it aligns better with weekly timesheets and overtime calculations.

What happens if payday falls on a holiday?

If a semi-monthly payday lands on a holiday or weekend, employers usually adjust the payday to the nearest business day.

• If payday falls on a Saturday or Sunday, employees may get paid on Friday before.
• If payday falls on a federal holiday, companies often move the pay date to the previous business day or the next available workday.

Is semi-monthly payroll better than bi-weekly?

It depends! Here’s a quick semi-monthly vs. bi-weekly payroll comparison:

• Semi-monthly payroll is great for salaried employees and businesses looking to minimize payroll processing with 24 pay periods per year.
• Bi-weekly payroll is better for hourly workers since it always covers two full weeks, making overtime calculations simpler.

If you need predictable, fixed paydays, semi-monthly payroll may be your best bet. But if you want consistent paycheck amounts and overtime tracking, bi-weekly payroll wins.

How do you calculate semi-monthly pay?

If you’re salaried, calculating your semi-monthly paycheck is simple:

• Take your annual salary and divide it by 24 (since there are 24 semi-monthly pay periods in a year).
• That’s your gross semi-monthly paycheck before taxes and deductions.

For hourly workers, it’s a little trickier because each pay period doesn’t always have the same number of workdays. That’s why bi-weekly pay often makes overtime and partial pay period calculations easier.

What are the disadvantages of semi-monthly payroll?

While semi-monthly payroll has its perks, it’s not perfect. Some common drawbacks include:

•  Irregular pay periods – Since months aren’t uniform, some pay periods cover fewer or more days than others, which can be confusing.
• Not ideal for hourly workers – Overtime calculations can get messy compared to a strict bi-weekly payroll schedule.
• Moving paydays – Unlike bi-weekly paychecks that always fall on the same weekday, semi-monthly pay dates shift depending on the calendar.

Which payroll schedule is right for you?

Choosing between semi-monthly, bi-weekly, weekly, or monthly payroll depends on your business and workforce.

• Salaried employees? Semi-monthly payroll is a solid choice for predictable cash flow.
• Hourly workers and overtime tracking? Bi-weekly payroll is usually easier to manage.
• High turnover industries like restaurants or construction? Weekly payroll might be the way to go.
• Minimal payroll processing? Monthly payroll works for executives or contractors but isn’t practical for most employees.