Timesheet Mobile now supports time tracking for companies who pay employees semi-monthly. Choose which day of the month your pay period ends and Timesheet Mobile will do the rest - including calculating overtime values which can be tricky when partial work weeks are included in the pay period range.
Semi-monthly Pay Period Described
Similar to a bi-weekly pay period, in a semi-monthly pay period employees are paid twice monthly. Unlike a bi-weekly pay period, the semi-monthly period uses a fixed end date, roughly in the middle of the month (e.g. the 15th or 16th of the month), to mark the end of the pay period. Pay checks may be issued on different dates than the period end but hourly pay is accumulated from the start of the month until the pay period end and then from the following day until the end of the month (e.g. March 1st - 16th and March 7th - 31st).
What makes semi-monthly pay periods somewhat complicated is that the period start and end dates do not always correspond with a company's defined work week. This is important because overtime is calculated based on an employee's time exceeding a threshold for the defined work week (e.g. Sunday to Saturday), which may not overlap with the date range of a semi-monthly period.
Consider the case of a company with a work week starting Sunday and a semi-monthly pay period ending on the 16th of each month and a weekly overtime threshold of 40 hours worked in a week. In March 2017, the first pay period starts on Wednesday, March 1st and ends on Thursday, March 16th. Since the work week starts Sunday, employees are due overtime if they exceed 40 hours in any full work week (Sunday - Saturday). Overtime in this example will be calculated based on work performed by employees during the weeks of February 26th (Sunday) - March 4th (Saturday), March 5th - March 11th, and March 12th - March 18th. Only March 5th - March 11th is contained entirely in the semi-monthly period.
In order that overtime hours be properly calculated and paid, hours worked for partial weeks must be computed for the entire week. For the week of February 26th - March 4th all hours up to 40 in the week will be accrued as regular time and any above 40 as overtime. A similar calculation is done for the week of March 12th - March 18th. This has the implication that the semi-monthly payroll cannot be properly completed until after all shifts worked through March 18th are completed.
Once the full week hour totals and overtime have been computed, determining what hours are accrued in the semi-monthly period follows as shown in the figure above. For partial weeks at the beginning of the pay period, hours worked in the week for days not included in the current pay period are accrued and included in the previous pay period. Hours worked for days of partial weeks included in the current semi-monthly period are included along with any overtime hours. For partial weeks at the end of the pay period, hours worked in the week for days not included in the current pay period are included in the next pay period.
The calculation method has the effect that hours for partial weeks occurring at the beginning of the semi-monthly period tend include more overtime hours than those for partial weeks occurring at the end of the semi-monthly period. This is because in typical work weeks, the overtime threshold is exceeded later in the week so one may expect that hours worked early in the week are counted as regular and those later in the week, after the 40 hour threshold has been reached are counted as overtime. This calculation method ensures that employees are paid for all hours worked in a work week and receive overtime pay during the period that the overtime accrued. This is true in cases in which a daily overtime threshold value applies.
It is also critically important that any timesheet errors contained in days necessary for the calculation of overtime are fixed when running a semi-monthly period that requires these days. In the example above, if an employee has errors between February 26-28th or March 17-18th, these errors must be fixed when running the timesheet for March 1st - 16th since overtime values included in this pay period rely on values from these days. Timesheet Mobile's reporting will help users identify and fix these errors so that they do not cause issues.
Setting up Semi-Monthly Pay Periods
Setting up and running semi-monthly payroll in Timesheet Mobile is completed with three clicks:
1. Navigate to Account > Settings > Account Settings and choose "Semi-monthly" for Pay Period.
2. Select the Pay Period End Date [settable from the 12th - 20th].
3. Navigate to Timesheets and run report for the current/past period or select a valid semi-monthly date range.
If you have already decide to run semi-monthly payrolls, Timesheet Mobile is pleased to support your chosen payroll. If you are still deciding or want to learn more about pay period choices and considerations for semi-monthly pay periods, you may find the following articles helpful:
If you have questions about running reports or getting your pay period and week setup, contact Timesheet Mobile support and we will be glad to help you.