How do you convert a biweekly payroll to a semi monthly payroll?

Answer 1

The most important thing to determine if the STATE allows for the employer to pay their employees semi-monthly as each state is governed by their own pay day laws. The next thing is to give your employees at least 30 days notice for them to plan out their finances. Next to consider is what the advantage would be to change from BW to SM. Currently, the specific 40 hour work week can easily be calculated for overtime. With a BW pay period from Sunday to Saturday and Sun to Sat, then processing time the week after for a pay date on Friday is very routine and simple. A semi monthly pay period may end in the middle of the week. Then the next payroll you must determine if there is any overtime to be paid for that split week. This can become an ardous task to compare timesheets from one week/period to the next. With a semi-monthly, the cycle has to be decided. Will the pay period be the 1st to the 15th, then 16th to the end of the month? In this case when will the pay date be? Again, you must check on state requirements. Let's say the 1-15th is paid on the 15th. IF you have the ability to have direct deposit, the payroll would probably need processed 2-3 days prior to the pay date. Then to consider is the overtime of those days when you actually estimated the time. So then, you'll need to pay retro pay on the next payroll for those overtime hours. If however, you choose to pay on the 20th or the 25th, then you would have time to pay all employees with no lag time. Once the period is decided, you can not change at your whim. It must be posted so the employees know when their pay cycle will be paid. If you consider the above, in my humble opinion, a biweekly period is by far easier to manage. To actually change the pay period, choose when you want to start with the new cycle. A good start would be the first of the new year. So, if your first pay period in the new year is January 1st to the 15th, your pay date is the 15 to the 20th. Work backward from there. Is the current pay period ending this week or next... plan out each pay period until then. You may end up with a few extra days that you will have to give a separate extra pay period for the hours earned. The wages will not be considered supplemental wages, but will need to be calculated properly for the current pay period.