Biweekly vs Semimonthly Payroll: Pros, Cons and Costs
Biweekly vs semimonthly payroll compared: pay periods, overtime math, costs, state pay frequency rules, the 27-paycheck year in 2027 and how to switch.
Biweekly payroll pays every other week, 26 times in most years, while semimonthly payroll pays on two fixed dates each month, 24 times a year. Biweekly suits hourly teams because each period holds exactly two workweeks; semimonthly suits salaried teams and monthly accounting. The right choice depends on your workforce, your state's pay frequency law and how your cash comes in.
This guide compares biweekly vs semimonthly payroll on cost, overtime, budgeting and compliance, includes worked numbers and covers the 27-paycheck year many employers face in 2027.
Biweekly vs semimonthly at a glance
| Factor | Biweekly | Semimonthly |
|---|---|---|
| Paydays per year | 26 (sometimes 27) | 24 |
| Payday pattern | Same weekday every two weeks | Fixed dates, e.g. 15th and last day |
| Hours per period (full-time) | 80 | Varies, about 86.67 on average |
| Overtime calculation | Simple, two whole workweeks | Workweeks can straddle periods |
| Months with three paychecks | Two per year (usually) | None |
| Payroll runs per year | 26 | 24 |
| Fit with monthly bills and books | Weaker | Strong |
| Best for | Hourly and mixed teams | Salaried teams |
Weekly (52 runs) and monthly (12 runs) payroll exist too, but many states restrict monthly pay for hourly workers, and weekly pay doubles the processing work.
How paychecks compare: worked example
Illustrative: a salaried employee earning $60,000 a year.
| Schedule | Paychecks | Gross per check |
|---|---|---|
| Weekly | 52 | $1,153.85 |
| Biweekly | 26 | $2,307.69 |
| Semimonthly | 24 | $2,500.00 |
| Monthly | 12 | $5,000.00 |
Annual pay and annual taxes are identical. What changes is the rhythm. A biweekly employee gets two months each year with three paychecks, which many treat as a bonus; a semimonthly employee gets a predictable $2,500 that lines up with rent and loan payments.
The 27-paycheck year: why 2027 matters
A year has 52 weeks plus one day (two in a leap year). Over time, those extra days add up to a 27th biweekly payday about every 11 years. January 1, 2027 is a Friday, so 2027 contains 53 Fridays. If your biweekly Friday payday lands on January 1, you will run 27 payrolls in 2027.
For salaried staff, you have two choices:
- Keep the per-check amount: 27 x $2,307.69 = $62,307.69, an extra $2,307.69 in payroll cost per $60,000 employee.
- Recalculate: $60,000 / 27 = $2,222.22 per check, keeping annual salary at $60,000. Give employees notice and check that no one falls below minimum wage or exempt salary thresholds.
Also check benefit deductions. Insurance premiums set as 26 equal deductions will be overcollected in a 27-pay year unless you adjust.
Overtime: the biggest practical difference
Under the Fair Labor Standards Act, overtime is calculated per workweek, not per pay period. The US Department of Labor's overtime guidance explains that each workweek stands alone. With biweekly pay, every period holds two complete workweeks, so payroll simply checks each week for hours over 40.
With semimonthly pay, a period might end on a Wednesday. If an employee works 30 hours Monday to Wednesday in one period and 16 hours Thursday and Friday in the next, the 6 overtime hours belong to a week split across two checks. You must track the full week and often pay that overtime in the second check, which is where many small-business payroll errors begin. If you bill clients for staff overtime, see how to invoice for overtime, and keep accurate hours with a timesheet template.
Hourly employees on a semimonthly schedule: a worked example
Illustrative: an hourly technician earns $24 an hour. Under a semimonthly schedule, the pay period for December 1 to 15, 2026 runs Tuesday to Tuesday, and another period starts December 16.
| Workweek (Sun to Sat) | Hours | Overtime hours | Paid in which check |
|---|---|---|---|
| Nov 29 to Dec 5 | 42 | 2 | Split: Nov 29 to 30 fall in the November period, so payroll must combine hours from both periods; overtime paid in Dec 15 check |
| Dec 6 to Dec 12 | 40 | 0 | Dec 15 check |
| Dec 13 to Dec 19 | 44 | 4 | Split: Dec 13 to 15 in first check, overtime confirmed only after Dec 19, paid in Dec 31 check |
Payroll must hold the overtime for the December 13 to 19 week until the week is complete, then pay $36 an hour for those 4 hours ($144) in the next check. On a biweekly schedule aligned to Sunday to Saturday weeks, every week closes inside its pay period, and none of this tracking is needed.
Payroll schedule and tax deposits
Your pay frequency does not change your federal tax deposit schedule, but it does change how often deposits come due. Employers on the semiweekly deposit schedule must deposit withheld income tax and FICA within a few business days after each payday, so biweekly payroll means 26 deposits a year and semimonthly means 24. Monthly depositors make one deposit by the 15th of the following month regardless of how often they pay. Your deposit schedule is based on the total tax you reported in a lookback period, as explained in IRS Publication 15. State withholding deposits often follow their own schedules.
What employees prefer
Employee preferences matter for retention. Hourly workers living paycheck to paycheck often value frequency, and some would choose weekly pay if offered. Salaried staff tend to like semimonthly pay because rent, mortgages and credit card bills fall on fixed monthly dates. Whatever you choose, consistency matters more than the schedule itself: never miss a payday, publish the full year's calendar in advance, and explain any change well ahead of time. Some employers also offer earned wage access through their payroll provider, which lets employees draw part of their earned pay before payday; check fees and state rules before adopting it.
What about contractors?
Independent contractors are not on payroll at all, so pay frequency laws do not apply to them. They are paid according to their invoice terms, such as net 15 or net 30, or on project milestones. If you use both employees and contractors, keep the two processes separate: payroll on a fixed calendar, and contractor payments through accounts payable against invoices.
Weekend and holiday paydays
Semimonthly paydays fall on fixed dates, so they regularly land on weekends and bank holidays. Decide in your policy whether you pay on the preceding business day (most common) or the following one, and check state rules, since some require payment no later than the scheduled date. With direct deposit, submit payroll at least two banking days before payday, more around Thanksgiving, Christmas and New Year. Biweekly Friday paydays occasionally hit holidays too, but far less often.
Cost comparison for a small business
Illustrative: a 12-person company using a payroll service that charges $40 per run plus $6 per employee per run.
| Schedule | Runs | Cost per run | Annual cost |
|---|---|---|---|
| Biweekly | 26 | $112 | $2,912 |
| Semimonthly | 24 | $112 | $2,688 |
The saving is about $224 a year, plus two fewer rounds of review and approval. Many providers charge a flat monthly fee instead, which removes the difference. Payroll taxes are the same on either schedule; see employer payroll taxes.
Cash flow and accounting
Semimonthly payroll matches monthly financial statements: each month carries exactly two payrolls, which makes budget vs actual reports clean. Biweekly creates two months a year with a third payroll, which can strain cash in those months if revenue is flat. Map the three-payroll months on your cash flow forecast and time client invoicing so payments arrive before them. Our guide to cash flow management covers buffers and payment terms.
State pay frequency rules
States set minimum pay frequencies, and both schedules are allowed in most states, but check before you choose:
- California: most employees must be paid at least twice per calendar month on designated paydays.
- New York: manual workers must generally be paid weekly unless the employer has authorization to pay less often.
- Many other states require at least semimonthly pay for non-exempt workers, and some allow monthly pay for exempt staff.
Also check final paycheck deadlines, which vary widely and are independent of your regular schedule. Minimum wage changes interact with pay periods too; see minimum wage by state 2027.
How to choose and switch
- Profile your team: mostly hourly with variable hours favors biweekly; mostly salaried favors semimonthly.
- Check each state's pay frequency law where you have employees.
- Look at cash timing: when do client payments arrive? Match paydays to inflows.
- Pick a start date, ideally January 1 or the start of a quarter.
- Notify employees in writing, with the new calendar and the transition paycheck explained.
- Update deductions for benefits, retirement and garnishments to the new number of periods.
- Update pay stubs to show the new period dates; a pay stub template helps if you process payroll manually.
New to payroll? Our step-by-step guide on how to do payroll yourself covers withholding, deposits and filings.
Common mistakes
- Calculating overtime by pay period instead of by workweek.
- Ignoring the 27th payday until December.
- Switching schedules without notice, leaving a longer gap than state law allows.
- Forgetting to recalculate per-period benefit deductions.
- Choosing a payday that falls before client payments typically clear.
Keep cash coming in before payday
Whatever schedule you pick, payroll depends on clients paying on time. Invoice promptly, use clear due dates and follow up early. Our free invoice generator creates professional invoices with no sign-up, and you can download each one as a PDF.
Frequently asked questions
What is the difference between biweekly and semimonthly pay?
Biweekly payroll pays employees every two weeks, on the same weekday, for 26 paychecks in most years. Semimonthly payroll pays twice a month on fixed dates, such as the 15th and the last day, for 24 paychecks a year. Biweekly checks are slightly smaller but more frequent; semimonthly checks line up with monthly bills and accounting periods but fall on different weekdays.
Is biweekly or semimonthly better for hourly employees?
Biweekly usually works better for hourly staff. Each pay period contains exactly two full workweeks, which matches how overtime is calculated under federal law. Semimonthly periods can split a workweek across two pay periods, so overtime for that week may need to be paid in the later check. That adds complexity and room for errors in timekeeping and pay calculations.
Does 2027 have 27 biweekly pay periods?
It depends on your pay schedule. January 1, 2027 falls on a Friday, so 2027 has 53 Fridays. An employer that pays biweekly on Fridays with a payday on January 1, 2027 will have 27 paydays that year. Employers paying on other weekdays or on the alternate Fridays will have 26. Check your payroll calendar now and decide how to handle salaries.
Which payroll schedule costs less to run?
Semimonthly payroll has 24 runs a year compared with 26 for biweekly, so if your provider charges per run or you spend time on each one, semimonthly is slightly cheaper. The difference is modest for small teams. Taxes are the same either way, because they are based on total wages, not on how often you pay.
Can I switch from biweekly to semimonthly payroll?
Yes, but plan it carefully. Check your state's pay frequency law, give employees written notice in advance, and create a transition calendar so no one goes longer between checks than the law allows. Recalculate per-period salaries, benefit deductions and retirement deferrals, and consider a bridge payment for the transition period. Many employers switch at the start of a calendar year.
Do states require a specific pay frequency?
Most states set a minimum frequency. California generally requires at least twice-monthly paydays for most employees, New York requires manual workers to be paid weekly unless the employer has authorization, and many states require at least semimonthly pay for hourly workers. A few states have no general rule. Always check the labor department rules for each state where you have employees.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
Try the invoice generator