Typical payroll schedules are weekly, bi-weekly, semi-monthly and monthly. Weekly and monthly pay schedules mean paydays happen once per week or month respectively. Bi-weekly means employees get paid once every two weeks. The semi-monthly schedule provides two paydays per month, often on the first and the 15th.
Each payroll schedule has pros and cons. Weekly pay schedules often cost the most and take the most time since the payroll department has to run payroll every week. Companies using payroll services typically incur fees each time the provider runs payroll.
Employees often prefer frequent pay checks such as the weekly or bi-weekly structure. A monthly pay schedule requires strict budgeting to make the money last until the next month's pay check. The monthly schedule is beneficial for employers, because it is usually cost-effective to run payroll once per month.
Semi-monthly pay schedules are easier for the accounting department since they fall on the same dates each month. Reports are easy to run when pay dates are consistent. Calculating overtime for hourly employees is more difficult because the pay period doesn't usually end on a full week.
Bi-weekly paydays are different than semi-monthly because they fall every two weeks instead of twice per month. This equals 26 pay periods per year for bi-weekly versus 24 pay periods for semi-monthly.