In the world of payroll management, a small error can lead to significant consequences. One common mistake that often trips up even seasoned professionals is the confusion between bi-weekly and semi-monthly pay periods. While they may sound similar, the difference is crucial and can result in substantial payroll discrepancies' Bi-W
Understanding the Difference
Bi-weekly: Employees are paid every two weeks resulting in 26 paychecks per year.
Semi-monthly: Employees are paid twice a month, typically on the 15th and first day of the month, resulting in 24 paychecks per year.
Imagine a scenario where an employee's annual salary is $52,000.
Correct Bi-weekly calculation: $52,000 ÷ 26 = $2,000.00 per paycheck
Semi-monthly calculation: $52,000 ÷ 24 = $2,166.67 per paycheck
Preventing Error Bi-Weekly vs. Semi-Monthly Payroll
To avoid a costly mistake:
Double-check your payroll system settings.
Educate your payroll staff on the differences between pay period types
Regularly audit your payroll processes.
Consider using automated payroll software that can handle different pay period calculations and double check those calculations.
Manually calculate the hourly rate from the quoted semi-monthly and gross annual wage. Use the hourly rate to verify both the semi-monthly and annual gross wage calculations.
Remember, in payroll management, attention to detail is key. A small oversight can lead to big problems, so always stay vigilant and precise in your calculations. I've had to recalculate my findings several times and it remains unclear to me how the payroll company calculated FIT. Dealing with three different realities is often time consuming!
Looks like an even bigger refund is due than the $625.01 I originally calculated as refund due from excessive FIT withholdings. See the report of wages from the Payroll Provider Comparison Bi-Weekly vs Semi-Monthly below.
Protect yourself, and your employees from shenanigans! Who do you trust?
The Payroll Company said,
Step 1: Calculate Your Semi-Monthly Gross Pay
You’re paid semi-monthly, meaning there are 24 pay periods in a year:
Semi-Monthly Gross Pay=Annual Salary 83,563.44/24 = $3,481.81
Step 2: Deduct Pretax Contributions
Retirement contributions and tax-free phone/internet reimbursements from the gross pay overlooked:
Taxable Gross Pay = $3,481.81
Step 3: Estimate Taxes
Taxes depend on various factors, but I’ll estimate Federal Income tax, Social Security, and Medicare:
Federal Income Tax:
Assume a 13.18% federal income tax rate:
Federal Tax = $3,481.81 \times 0.1318 = $458.91
Social Security:
Social Security is 6.2% up to the annual wage cap ($168,600 for 2024):
Social Security = 3,481.81\times 0.062 = $215.87
Medicare:
Medicare is 1.45% of all wages:
Medicare = 3,481.81\times 0.0145 = $50.49
Step 4: Calculate Net Pay
Subtract estimated taxes from the taxable gross pay:
Net Pay = Taxable Gross Pay − (Federal Tax + Social Security + Medicare)
Net Pay = $3,481.81 − (458.91+215.87+50.49) = $2,756.54 - 208.91 + 62.50 = $2,610.13
Summary
Semi-Monthly Gross Pay: $3,482.27
Taxable Gross Pay: $3,481.81
Estimated Taxes: $725.27
Federal: $458.91
Social Security: $215.87
Medicare: $50.49
Net Pay: $2,610.13
Total Annual Taxes Due: FIT $11,013.84 + SS $5,180.88+ Med $1,211.76 = $17,406.48

i-Weekly vs. Semi-Monthly Payroll
I say,
Step 1: Calculate Your Semi-Monthly Gross Pay
You’re paid semi-monthly, meaning there are 24 pay periods in a year:
Semi-Monthly Gross Pay=Annual Salary 83,574.40/24 = $3,482.27
Step 2: Deduct Pretax Contributions
Deduct the retirement contributions and tax-free phone/internet reimbursements, add the post tax Roth contribution to the gross pay:
Taxable Gross Pay = 3,482.27 − (208.91+62.50) + (139.27) = $3,621.54
Step 3: Estimate Taxes
Taxes depend on various factors, but I’ll estimate Federal Income tax, Social Security, and Medicare:
Federal Income Tax:

Social Security:
Social Security is 6.2% up to the annual wage cap ($168,600 for 2024):
Social Security = 3,621.54\times 0.062 = $224.54
Medicare:
Medicare is 1.45% of all wages:
Medicare = 3,621.54\times 0.0145 = $52.51
Step 4: Calculate Net Pay
Subtract estimated taxes from the taxable gross pay:
Net Pay = Taxable Gross Pay − (Federal Tax + Social Security + Medicare)
Net Pay = $3,621.54 − (398.54+224.54+52.51) = $2,945.95 + 62.50 - 208.91 = $2,799.54 (less post tax Roth 139.27) = $2,660.27
Summary
Semi-Monthly Gross Pay: $3,482.27
Taxable Gross Pay: $3,621.54
Estimated Taxes: $675.59
Federal: $398.54
Social Security: $224.54
Medicare: $52.51
Internet and Telephone benefit $62.50
Pretax 401K contribution deduction $208.91
Post Tax Roth $139.27
Net Pay: $2,660.27
Total Annual Taxes Due: FIT $9,564.96 + SS $5,388.96 + Med $1,260.24 = $16,214.16
Manual Wage Brackets (Expand to view):
In this wage bracket FIT $826.16 monthly withholding
($826.16 - $797.08 = $29.08 over the marginal rate = $348.96 annual refund)


And, from the twilight zone 3rd Dimension....
Copilot says:
Annual Salary:
$83,574.40
Semi-Monthly Pay:
$83,574.40 / 24 = $3,482.27
Deductions:
Pre-tax Retirement Contributions: $208.91
Tax-Free Phone and Internet: $62.50...I guess this wasn't tax free!
Taxable Income Per Paycheck:
$3,482.27 - $208.91 + $62.50 = $3,335.86
Federal Income Tax:
For 2025, the tax brackets for married filing jointly are:
10% for incomes $23,850 or less
12% for incomes over $23,850
22% for incomes over $96,950
Since your annual income is $83,574.40, you fall into the 12% bracket for most of your income.
Social Security Tax:
6.2% of $3,335.86 = $206.82
Medicare Tax:
1.45% of $3,335.86 = $48.37
Total Taxes Per Paycheck:
Federal Income Tax (approx. 12%): $3,335.86 * 12% = $400.30 Social Security Tax: $206.82 Medicare Tax: $48.37
Net Pay Per Paycheck:
$3,335.86 - $400.30 - $206.82 - $48.37 = $2,680.37 + 62.50 - 208.91 = $2,533.96.
Estimated Taxes: $655.49
Federal: $400.30
Social Security: $206.82
Medicare: $48.37
Total Annual Taxes Due: FIT $9,607.20 + SS $4,963.68 + Med $1,160.88 = $15,731.76
ChatGPT says:
Step 1: Calculate Your Semi-Monthly Gross Pay
You’re paid semi-monthly, meaning there are 24 pay periods in a year:
Semi-Monthly Gross Pay=Annual Salary 83,574.40/24 = $3,482.27
Step 2: Deduct Pretax Contributions
Deduct the retirement contributions and tax-free phone/internet reimbursements from the gross pay:
Taxable Gross Pay = 3,482.27 − (208.91+62.50) = $3,210.86
Step 3: Estimate Taxes
Taxes depend on various factors, but I’ll estimate federal income tax, Social Security, and Medicare:
Federal Income Tax:
Assume a 22% federal income tax rate:
Federal Tax = 3,210.86 \times 0.22 = $706.39
Social Security:
Social Security is 6.2% up to the annual wage cap ($168,600 for 2024):
Social Security = 3,210.86 \times 0.062 = $199.07
Medicare:
Medicare is 1.45% of all wages:
Medicare = 3,210.86 \times 0.0145 = $46.56
Step 4: Calculate Net Pay
Subtract estimated taxes from the taxable gross pay:
Net Pay = Taxable Gross Pay − (Federal Tax + Social Security + Medicare)
Net Pay = $3,210.86 − (706.39+199.07+46.56) = $2,258.84
Summary
Semi-Monthly Gross Pay: $3,482.27
Taxable Gross Pay: $3,210.86
Estimated Taxes: $595.83
Federal: $706.39 this is a monthly rate (correction $353.20)
Social Security: $199.07 this is per paycheck
Medicare: $46.56 this is per paycheck
Net Pay: $2,258.84 this should be $353.20 FIT more = $2,612.04 Correction
$2,612.04 + 62.50 - 208.91 = $2,465.63
Total Annual Taxes Due: FIT $8,476.68 + SS $4,777.68 + Med $1,117.44 = $14,371.92



*Keep in mind FUTA and SUI, or other garnishments and deductions are not calculated into the above net checks.
See Also: Prior Year Publication 15-T
See Also: Fringe Benefit Guide https://www.irs.gov/pub/irs-pdf/p5137.pdf

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