Bimonthly payroll definition

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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 not recommended! In many locations, the longest legally 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 noted below:

  • Bi-weekly payroll. A bi-weekly payroll is paid every other week, usually on a Friday. Under this system, there are 26 payrolls per year. Employees tend to like a bi-weekly payroll, since they receive two paychecks per month, as well as three paychecks during two months of the year. They therefore have extra cash during two months of the year that do not have to be allocated to monthly expenses, such as rent or utilities, and so can be used for other purposes.

  • Semi-monthly payroll. A semi-monthly payroll is paid twice a month, usually on the 15th and last days of the month. Under this system, there are 24 payrolls per year. This approach is used by many payroll departments, since it involves preparing substantially fewer payrolls than would be the case under a weekly payroll regimen.

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.

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Bi-weekly vs. Semi-Monthly Payrolls

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.