Bi Weekly vs. Semi Monthly PayI am starting a new job in about 3 weeks and I am very excited. I received my offer letter today and it stated that employees are paid semi-monthly. I have always been paid bi-weekly in the past. Could anyone explain the advantages or disadvantages on being paid semi-monthly as opposed to a bi-monthly pay period? Thank you in advance to all who respond. Semi-monthly means you will always get 2 checks a month; usually the 15th and the 30th (or 31st) depending on the month. I always like semi-monthly for 2 reasons. The first is bills. It's really easy to pre-plan your bills by knowing their due date. If you know a bill is due on the 20th, you pay that bill with your first check of the month. If it's not due until the 10th of the following month, you can pay it with your second check. You don't have to "check" when your next payday is. You already know. Another advantage is your hours. The average 40 hour a week person is credited for working 2080 hours per year. Divide that by 24 pays in a year (instead of 26 for bi-weekly) and your checks average out to 86.66 hours per pay instead of 80 hours per pay. Multiply your hourly rate by 80 and by 86.66. You'll see the difference. "Another advantage is your hours. The average 40 hour a week person is credited for working 2080 hours per year. Divide that by 24 pays in a year (instead of 26 for bi-weekly) and your checks average out to 86.66 hours per pay instead of 80 hours per pay. Multiply your hourly rate by 80 and by 86.66. You'll see the difference." I'm not sure I understand your reasoning here, fishers. The dollar amount of the OP's pay will be the same at the end of the year, regardless of whether she/he is paid bi-weekly or bi-monthly. The difference is that each check will be for slightly more money, because there are fewer checks over the same amount of time. I think you & I are both in agreement here. But, the number of hours he/she will be "credited" for is the same. Actually, if you go by the standard calculation of 4.3 weeks in a month, that would be 51.6 weeks of "working," vs. 52 weeks calculated on a bi-weekly basis. IMHO, there is no advantage insofar as being "credited" for hours worked. But, yes, I agree that being paid twice per month is far easier to keep track of than every two weeks. I think the only downside arises if you are living paycheck-to-paycheck and now have to go from being paid every 14 days to, in some cases, 18 days (in the case where the 15th is on a Sunday, you probably get paid on the 13th, the previous Friday and then wait until the 31st for your next paycheck). Good luck with the new job. I don' t like semi-monthly because it means I' d have to wait longer for my money and it' s a little harder to track as you don' t have a steady date to get paid on. Personally I prefer the twice a month. It makes it much easier to set up automatic payments from your accounts, etc. Either way, however, it is out of your hands. The company does whichever method it does and you have to adjust to it. Over the course of a year, it really doesn' t matter which way you' re paid. One way you' re paid 24 times a year, the other way you' re paid slightly less 26 times a year, but the total pay for the year is still the same. If you salary is, let' s say, $50K per year, regardless of whether your paid once a year or once a week or semi-monthly or bi-weekly, the total is till going to end up being $50K per year. Knowing how you' re going to be paid may help you with household budgeting and bill paying, but that' s about it. I' ve only had weekly and biweekly. Weekly is better. Weakly is very bad. I did a contract job where I turned my hours in every Monday, the direct deposit showed up on the same Thursday. I liked that a lot. Work Saturday, get the extra money in four days. Another issue is the hold back period. Right now, I' m paid on Thursday not for the two week period that ended last Friday, but the Friday before. That makes your first paycheck a long wait. I don' t know how semi monthly works. It really is out of your hands. My point wasn't so much that her salary was different; it was more so her paychecks would be different. My last job had everything generated and operated in accordance to a 26 pay/bi-weekly schedule. Some months we would get "an extra pay", which by the way never seemed to be extra to me, but hourly people were excited by it. I'm strictly talking about the regular 40 hour work week for 52 weeks a year. Your standard calculation of 4.3 weeks in a month comes from the fact that some months have an additional week, so it's not a uniformed 4 weeks in a month. This calculation makes sense if you get paid monthly, however, to best explain bi-weekly vs. semi-monthly, it's best explained when you compare number of paychecks and number of hours per paycheck. True, in the end you make the same annual salary, but again, your paychecks would look different. | |
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