Semi-Monthly Payroll
amb_ny
3 Posts
Can anyone provide information about their experience with running a semi-monthly payroll cycle for non-exempt employees? The two pay periods would probably be slightly different, so time-keeping, OT calculations and such seem complicated. Any experience with this, suggestions, thoughts? Thank you.
Comments
How much overtime is generally worked? How many non-exempts do you have? What payroll system are you using? Are you currently doing both (semi for exempts and biweekly for non-exempts) cycles of payroll? Have you considered going biweekly for all employees rather than semi-monthly?
Personally I love bi-weekly and it is generally my preference all things considered because 2 workweeks = 1 pay period. And your scheduled dates always fall the same. Employees know they will get paid every other Friday and they know all changes have to be made by Monday morning at 8 am, etc. For Semi-monthly, that schedule gets thrown to the wind.
That said, the finance side usually would rather see the semi-monthly payroll because of the ease in accounting.
However, any good payroll system should be able to handle either. Who/what system do you currently use?
I am currently on a semi-monthly cycle for both Exempt & NX, but I am not a fan. The pay dates are difficult for my EE to remember, and even more difficult for my NX to pay the bills & budget when there is a lag between payrolls. My hope is that we will be able to migrate to a biweekly payroll for 2009, so my EE will know that they will be paid every other Friday.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I agree that bi-weekly is easier for payroll, but finance does love semi-monthly so its not going to change. That said, it is more difficult for employees to understand but they do get used to it. I also introduce it at New Employee Orientation and publish a calendar for managers to post in their area. I do it in Excel and it gives managers their payroll deadline day and shows payday for every pay period. It also makes it easy to explain the pay period, overtime and the number of work days in a given pay period.
Overtime is earned based on the workweek. You calculate overtime based on the work week, not the pay period. Your work week stays constant, only the cut off for payroll moves around. So you can pay an employee for the regular hours they worked Monday, Tuesday and Wednesay on one paycheck, and the overtime they worked on Friday in the next paycheck.
I came from only ever doing bi-weekly and it did take me some time to get the nuances down, but you will get there. [:)]
I love semi-monthly payroll. You only have to process it twice a month, you/we get paid the 15th and last day of month, if either fall on a weekend or holiday we get paid the day prior to (like today). Therefore, people should always have their "rent" money which is usually due the 1st of the month (at least that's how it was when I rented). Regarding the NX employees, Time Sheets are turned in weekly, there most likely is a delay with adjustments (OT, Sick, Per, Vac) taken (like all/most other payroll frequencies), Holidays are paid current.
It does work well for accounting / finance dept., not as many accruals. It's less of an expense, if your paying per pay fees, check fees, etc. Less Journal Entries, etc.
I really prefer semi-monthly vs. any other method.
Think of it this way - less work.
I love semi-monthly and I am the one in charge of coming up with the schedule!
It is confusing at first as a EE but in time all get used to it.
Although I love it, biweekly would be better - less time overall, little confusion on supervisor or EE side, and only 2 extra payrolls. I believe the fact that there are only two extra payrolls makes it better. I believe finance may even like it better due to consistent schedule.
If you have the option, go with biweekly but don't be afraid of semi-monthly.
I'll weigh in on the biweekly side. It is much much easier schedule wise than Semi-Monthly. Both for the payroll processor and everyone involved. I can tell my supervisors that they need to make sure their employees have timesheet edits to me by 8 am monday morning...every week actually....I can tell the employees that all changes to deductions have to be to me by (you guessed it) 8 am Monday morning....etc.
And it is much easier for my mgmt/execs to know that I need every other Monday to process payroll(s). They have generally learned to not schedule my time for anything that day every two weeks.
On the payroll forum I frequent, the vote comes down to about a 50/50 split on semi-monthly vs biweekly. Generally BW is preferred when there are a lot of non-exempt OT-earning employees. SM is preferred when much of your workforce is exempt/salaried.
If I did weekly, I would never get to take a vacation! Although there are some states/union contracts that do require some employee groups to be paid weekly. I hope to never move to one of those!
Can you email a copy of your pay period schedule? My email address is dbaker @detroitpubliclibrary.org
Thank you