What Is Semi Weekly for Payroll?
Traditionally, employers compensate their employees on a weekly, biweekly, semimonthly or monthly basis. States have minimum payday laws that dictate payday options to employers. You may pay sooner or more often than the mandated time frame but not afterward or less frequently. A semi-weekly payroll occurs more frequently than all the traditional paydays. It means that you pay your employees twice a week, such as on Mondays and Fridays.
If you decide to pay semi-weekly, develop pay period dates, which are the actual days your employees will be paid for each payday. Let’s say your paydays fall on Monday and Friday. To allow enough time for payroll processing, Monday’s payday may include time worked from Thursday to Saturday of the prior week. Friday’s payday may include time worked from Sunday to Wednesday of the current week. For Monday’s payroll, time cards could be due by Sunday morning; and for Friday’s payroll, by Thursday morning.
Compensate hourly-paid employees according to their time card hours. Multiply their regular hours worked by their regular pay rate to arrive at their regular wages. Under federal law, you must pay nonexempt employees overtime at 1.5 times their regular pay rate for work hours that exceed 40 for the week; this applies to most hourly workers. Your state may require overtime or double-time pay for work hours that go over a certain amount for the day or hours worked on the seventh straight day of the week. Keep all this in mind when processing your semi-weekly payroll.
Apply caution when making certain tax deductions for semi-weekly paid employees. This process is easy when a flat withholding percentage is required, such as with Social Security and Medicare taxes. Federal income tax withholding, however, is based on the Internal Revenue Service Circular E tax tables and the employee’s W-4, which includes her filing status and allowances. The Circular E tax tables are for weekly, biweekly, semi-monthly and monthly payrolls. You would need to manually calculate semi-weekly withholding based on the daily tax table and the number of days in the semi-weekly pay period. Depending on your state, you may need to apply a similar approach for state income tax withholding, or use a flat percentage.
For an employer, a semi-weekly payroll is time-consuming and could be prone to errors. It can also get expensive due to the administrative costs associated with processing payroll twice per week. A semi-weekly pay frequency may be more suitable for compensating independent contractors instead of employees. Independent contractors calculate and pay their own taxes and they don’t receive employee benefits. In this case, you pay the contractor through accounts payable, not payroll.