What is Semi-Monthly?
The term semi-monthly refers to an event that occurs twice a month ("semi" means "halfway"), and is often confused with the term bi-monthly, which means every two months ("bi" means "every two").
In the case of payroll periods, semi-monthly usually means "twice a month," with one pay period starting the 1st day of the month and ending on the 15th day of the month, and the other pay period starting on the 16th of the month and ending on the last day of the month.
How to Calculate Overtime on a Semi-Monthly Pay Period
If overtime is paid for over 8 or 10 hours in a workday, then overtime for semi-monthly pay is calculated the same as any other payroll timeframe.
However, if overtime is paid for time worked above 40 hours per week, a carry-over system must be implemented.
The first step to implementing a carry-over system is to establish an official day of the week that will always serve as the start of the pay week.
So if you choose "Monday" as the start of the pay week, then all weekly hours will be totaled from Monday to Sunday.
Whichever day you chose to be the start of the pay week, if the semi-monthly payroll period ends during the pay week you will need to carry-over hours to the next pay period for overtime purposes.
For example, if your pay week starts on a Monday, but your semi-monthly payroll period ends on a Wednesday, you will need to total up and carry-over any hours worked Monday through Wednesday.
Next, once the pay week has been completed, add the carry-over hours to the Thursday to Sunday work hours to determine if the employee worked more than 40 hours for the week.
If the employee worked more than 40 hours during the pay week, you would convert a number of regular hours worked between Thursday and Sunday to overtime hours, with the number being equal to the excess hours over 40.
Here is an example of how to calculate overtime if the 1st-15th semi-monthly payroll period ends on a Wednesday, but your pay week ends on a Sunday.
|Day of the month||Day of the week||Hours worked|
|Start of new pay period|
|Carryover hours from partial pay week on last pay period:||26|
|Hours worked for partial pay week in new payroll period:||16|
|Total hours for pay week:||42|
|Overtime hours for pay week (42 – 40):||2|
|Regular hours worked for next payroll period (16 – 2):||14|
|Overtime hours earned for next payroll period:||2|
Note that carryover hours are paid in the payroll period in which they occurred, and are only used to determine if any overtime hours were earned for the next payroll period.
Of course, if the end of the semi-monthly payroll period ends on the same day the pay week ends, there would be no carryover hours.
If it helps to further your understanding of how to calculate weekly overtime for semi-monthly payroll periods, here is a calculator you can use to check your calculations: