16 Jun, 2023

What Is Semi Monthly Pay? Pros And Cons

What is Semi Monthly Pay? Pros and Cons
Written by: - Phil Baker

Depending on the job that you have, and the company that you work for, the way in which you get paid may differ. Some jobs come with a salary, others pay by the hour or with daily rates. You may get paid monthly, once every 4 weeks, or even once a week, it really will depend on your specific job and where you work. 

Some companies will give you the option to decide when you get paid, and if they do this, you may find that they offer something called “semi monthly” pay. Before you say yes, you’ll probably want to know what semi-monthly pay actually is, and if it is a good idea to get paid in this fashion. 

In this guide, we’ll be taking a look at semi-monthly pay to understand what it is, and what the pros and cons of this style of pay are. So if you want to find out if semi monthly pay is the right choice for you, keep on reading!

Also read: How To Organize Your Financial Records In 5 Easy Steps

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What is Semi Monthly Pay?

First things first, what is meant by semi monthly pay? Well as the name suggests, semi-monthly pay is a payment format used by employers that allows them to pay their employees more than once a month. Unlike employers who pay monthly, those that pay semi-monthly will process the payroll twice a month to ensure that employees get two pay packets every month.

Semi monthly pay will be paid upon two set dates each month. These dates will not change, and they will be the same from each month to the next. So, if you get paid on the 14th and the 28th of February, you will also be paid on the 14th and the 28th of March, and so on. 

This style of pay differs from bi-weekly pay as you will never be paid more than twice in a month when you are paid via semi-monthly pay. With this style of pay, there will never be a month when more than two pay packets are processed for an employee, and each employee will never be paid more than 24 times a year. 

There are other payment structures that pay employees multiple times a month, but the only payment structure that will ensure that you only get paid twice a month is semi-monthly pay. So, is this style of payment a good thing? Let’s take a look at the pros and cons of this to help you decide. 

Also read: Self-Employed Taxes For Dummies


Common Semi Monthly Pay Schedule

Some of the most common schedules for companies that pay employees semi monthly include the following dates:

  • 1st and 15th

  • 1st and 16th

  • 15th and 31st*

  • 16th and 31st*

*on months when there is no 31st, payments will be made on the last working day of the month.

Also read: 6 Ways To Prove Your Self-Employed Income As A Contractor


Pros and Cons of Semi Monthly Pay

Now that we have taken a look at what semi monthly pay is, let’s take a look at some of the pros and cons of this payment method as this will help you decide if it is an option for you. 



Consistent Flow of Money

When you get paid semi monthly, you will have a more regular flow of payments into your account. Instead of having a single monthly payment, you will have multiple and this can help with budgeting and improving your cash flow. A lot of people struggle to make a single monthly payment last for the whole month, so semi-monthly payments can make a big difference for these people.


Larger Pay Packets Than Bi-Weekly Payments

A lot of companies pay their employees bi-weekly, but this can mean that your pay packets are rather small. It can be difficult to budget things such as bills for utilities around bi-weekly payments, simply because the pay packets do not contain that much money. But semi monthly payments ensure that you have a regular flow of cash, while also getting paid more money - cool right? 


Regular Dates

With semi monthly payments, the dates upon which employees will get paid are set in stone. Every month, the employees will be paid on the same two dates, and this can really help when it comes to things such as budgeting and making plans. This isn’t something that happens with most payment schedules. 

Many employees on monthly payment schedules will be paid on the “last day of the month”, but this date will change month to month, and the same happens with bi-weekly paychecks. With semi monthly paychecks, your payments are a lot more consistent and this can really make a difference in the lives of employees.

Also read: Breaking Down Your Pay Stub Deduction Codes



Not Allowed in All States

There are some States in the USA where semi monthly payroll is not allowed. For example, semi monthly paychecks are not allowed in New Hampshire. So, depending on where you are based, this might not be an option for your company. 


Longer Wait For New Employees

For employees that are new to your company, semi monthly paychecks may mean that they end up having to wait longer for their first paycheck. This will depend on the date upon which they join the company. 

Also read: 5 Ways A Renter Can Show Proof Of Income



Is It Better to Get Paid Monthly or Semi Monthly?

So, let’s wrap this up by taking a look at whether it is better to get paid monthly or semi monthly. As we have already established, there are both benefits and drawbacks to being paid semi-monthly in comparison to bi-weekly. So what about monthly in comparison to semi monthly?

Well, from an employee perspective, many people will argue that semi monthly is the better option. It provides stability to employees, and makes budgeting a lot more achievable for many people. While each paycheck will contain less money, it can be much easier to manage a smaller amount of money when you know you have another payment coming shortly after. Of course, ultimately it will depend on personal preference.

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In short, semi-monthly pay is a payment schedule that many employers use which allow their employees to receive 2 paychecks every month. These paychecks will come on the same two dates each month, giving many employees a much more consistent payment schedule than other payroll methods. In this guide, we have taken a look at the pros and cons of semi monthly pay. 

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