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    Tuesday
    Jan182011

    What is a bimonthly payroll?

    The term bimonthly means that something occurs once every two months. Therefore, a bimonthly payroll means paying employees once every two months. Since this is not only illegal in many locations, but also an oppressively long pay period, a bimonthly payroll is extremely not recommended! In many locations, the longest allowed payroll period is one month. In the rare situation where a business is actually using a bimonthly payroll, the calculation of pay for each payroll cycle is to divide annual pay by six. Thus, a person earning $120,000 per year will be paid $20,000 in gross wages in each bimonthly payroll.

    It is possible that the term "bimonthly" is being confused with the terms semi-monthly or bi-weekly. Their definitions are:

    • Bi-weekly payroll. This payroll is paid every other week, usually on a Friday. Under this system, there are 26 payrolls per year.
    • Semi-monthly payroll. This payroll is paid twice a month, usually on the 15th and last days of the month. Under this system, there aer 24 payrolls per year.

    Thus, a bimonthly payroll is very likely a term that is being incorrectly used, where the user really means either a bi-weekly payroll or a semi-monthly payroll.

    If there is a choice between implementing a bi-weekly or a semi-monthly payroll, the best practice from an efficiency perspective is to use a semi-monthly payroll, since there are two fewer payrolls to prepare per year. In addition, it is easier to calculate monthly payroll deductions under a semi-monthly system, since there are always two payrolls per month; conversely, there are two months per year in which there are three bi-weekly payrolls, which makes it difficult to handle deductions in the third payroll of the month.

    Related Topics

    How many payroll cycles should I have?
    The work week
    What is payroll?
    What is the difference between a semi-monthly and biweekly payroll?

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