How to Calculate a Semi-Monthly Payroll

Calculating a semi-monthly payroll is not as straightforward as calculating a weekly or biweekly payroll. A weekly pay date may occur every Friday, and a biweekly pay date every other Friday. A semi-monthly pay date, however, will fall on different days of the week. A semi-monthly payroll has 24 pay dates per year, and employees are paid twice per month; pay dates typically occur on the last or first day of the month and on the 15th.

Pay benefit days at the employee's normal rate. If an hourly employee has paid time off -- vacation, sick or personal days -- it should be stated on the signed time card; code the appropriate benefit days into the system and pay them at her regular rate.

To pay a salaried employee vacation, sick or personal time, code it accordingly. Note that her gross wages should not change unless she has taken too many days and should not be paid for them. In this case, use the example in Step 2 to arrive at her daily rate; multiply her daily rate by the amount of unapproved days off she has taken and subtract that amount from her pay.

Calculate pay for salaried employees. Salaried employees do not complete time cards and are typically paid current (through the pay date). Assuming a 40-hour work week, they are paid 86.66 hours each pay date (86.66 x 24 pay dates = 2080 hours yearly). If you use payroll software, the system will multiply these hours by the hourly rate to arrive at the gross wages.

To prorate a salaried semi-monthly employee's wages, follow this example to arrive at his daily rate:

Employee's salary = $32,000
32,000 / 24 pay dates = $1333.33 (paid twice per month)
Divide $1333.33 by the amount of days in the pay period to arrive at the daily rate.

Salaried employees are generally paid the same amount each pay date. Ensure that their pay is correct before printing checks and closing the payroll.

Calculate pay for hourly employees. Hourly employees are generally required to submit signed time cards, which state their hours worked per week. Calculate the regular hours worked and pay them at the employee's regular rate. For example, if an employee has a total of 72 hours in a pay period and his hourly rate is $10 per hour, his gross wages are $720.

Depending on the company's payroll processing schedule, hourly employees' pay may vary each pay date. The cutoff date for semi-monthly payroll processing can be as much as 3-5 days prior to the pay date, especially if the pay date occurs on a weekend. At the start of each year, determine which pay dates occur on weekends to allow enough time for payroll processing. Ensure that the appropriate departments are informed so hourly time cards are submitted in a timely manner.

Difficulty: Moderately Challenging