A 1st and 15th semi-monthly payroll pays employees twice a month on those two calendar dates, producing exactly 24 paychecks a year. Each check covers roughly half a month, though the actual days in a period shift with the length of the month. The fixed dates make budgeting predictable, but they also create three recurring headaches: overtime that crosses period boundaries, paydays that land on weekends, and mid-period hires or departures that need proration.
How the Schedule Works
Because the pay dates are tied to the calendar rather than to a day of the week, the count is always 24 pay periods a year. That number never changes. Biweekly payroll, by contrast, pays every other Friday (or another chosen weekday) and produces 26 pay periods, with two months a year containing three paydays. The distinction matters for per-check salary math and for how benefit premiums get spread across paychecks.
The 1st and 15th is one common pairing; the 15th and the last day of the month is the other. A few states prescribe specific semi-monthly windows. Louisiana requires payment on the 1st and 16th unless the employer sets different dates. Nevada requires wages earned before the 16th to be paid by the end of the same month. Whichever pair an employer uses, the annual count stays at 24.
Calculating Each Paycheck
For salaried employees, divide the annual salary by 24. Someone earning $60,000 receives $2,500 gross each payday, whether the period covered 13 days in February or 16 days in March. That per-check amount stays level all year, which is a big reason employers pick this schedule for exempt staff.
Biweekly pay divides the same $60,000 by 26, producing about $2,307.69 per check. The weekly equivalent is roughly $1,153.85. Annual compensation is identical; the per-check figure changes what gets withheld each period for taxes and benefits.
Prorating a Partial Period
When someone starts or leaves mid-period, prorate rather than issue a full check. The standard method is to count the working days in the period, divide the regular semi-monthly amount by that number to get a daily rate, and multiply by the days the employee actually worked. A $2,500-per-period employee who works 7 of 14 working days receives $1,250 gross. Some payroll systems prorate by calendar days instead of working days, so the exact figure depends on which method the employer uses.
Overtime for Non-Exempt Employees
This is where a 1st-and-15th schedule gets genuinely difficult. Federal law requires overtime to be calculated on a fixed, recurring seven-day workweek, not on the pay period. A workweek is 168 consecutive hours and does not need to line up with the calendar week or the pay period.1eCFR. 29 CFR 778.105 – Determining the Workweek The 1st and 15th almost never fall on the last day of a workweek, so workweeks routinely straddle two pay periods.
Take an employee whose workweek runs Sunday through Saturday when the pay period ends on the 15th, a Wednesday. Hours worked Thursday through Saturday belong to the same workweek but land in the next pay period. If the workweek totals more than 40 hours, overtime is owed, but the payroll administrator will not know the final count until Saturday. The practical fix most employers use is to lag overtime by one cycle: straight-time hours get paid in the current period, and the overtime premium for any split workweek gets paid in the following period.2U.S. Department of Labor. FLSA Overtime Calculator Advisor – Hours Worked in the Workweek Example Overtime still gets paid; it just arrives one check late.
This split-workweek problem is the single biggest reason many employers with a large hourly workforce use biweekly pay instead, where the 14-day period divides evenly into two complete workweeks. If you run semi-monthly payroll with non-exempt employees, use a timekeeping system that tracks hours by workweek rather than by pay period. Getting this wrong exposes the company to back-pay claims and Department of Labor scrutiny.
When the 1st or 15th Falls on a Weekend or Holiday
Those dates will regularly land on weekends. When that happens, most employers pay on the preceding Friday. Banks do not process ACH transfers on Saturdays, Sundays, or Federal Reserve holidays, so payroll has to go out before the closure.3Board of Governors of the Federal Reserve System. K.8 – Holidays Observed by the Federal Reserve System 2026-2030 The same applies when a pay date coincides with a federal holiday such as Labor Day or Christmas.
The Federal Reserve’s own policy: when a holiday falls on a Saturday, Reserve Banks open the preceding Friday; when a holiday falls on a Sunday, offices close the following Monday.3Board of Governors of the Federal Reserve System. K.8 – Holidays Observed by the Federal Reserve System 2026-2030 That Monday closure can catch employers off guard. Build a calendar at the start of each year marking every adjusted pay date so payroll submissions do not miss the window. Direct deposits generally have funds available by 9 a.m. on payday, but the payroll file usually needs to be submitted one to two business days before that.4Nacha. ACH Payments Fact Sheet
What Comes Out of Each Check
Every semi-monthly paycheck carries several layers of deductions before net pay.
Federal Income Tax
Withholding depends on the employee’s Form W-4, which tells the employer the filing status, dependents, and any additional withholding requested.5Internal Revenue Service. Form W-4 – Employee’s Withholding Certificate The IRS publishes withholding tables specific to each pay frequency, so the semi-monthly table applies. Two employees with identical salaries can have very different withholding if their W-4 entries differ. If a W-4 is never submitted, the IRS treats the employee as a single filer with no adjustments, which almost always results in over-withholding.
FICA Taxes
Social Security tax is withheld at 6.2% of gross wages up to the annual wage base, and Medicare tax at 1.45% with no cap. An additional 0.9% Medicare surtax applies to wages above $200,000 in a calendar year. The employer matches the 6.2% and 1.45% portions.
Benefits and Voluntary Deductions
Health insurance premiums, retirement contributions, HSA deposits, and similar items are typically deducted per paycheck. Because a semi-monthly schedule produces 24 checks, the annual premium is divided by 24 and pulled evenly from each one. A biweekly schedule divides the same premium by 26, resulting in a smaller per-check deduction but two extra deduction periods. Employers switching between the two schedules need to recalculate every benefit deduction, and that transition is a common source of errors.
State Laws Can Override the Schedule
Not every state allows semi-monthly pay for all employees. A handful have no pay frequency law. Others require weekly pay unless the employer gets special approval from the state labor department. Some restrict monthly pay to exempt or executive employees, meaning hourly workers must be paid more often. A few set maximum intervals between paydays that can be shorter than the roughly 15- or 16-day gaps a 1st-and-15th schedule creates.
Before adopting the schedule, check your state’s labor department for minimum pay frequency requirements. With employees in multiple states, the strictest state’s rule applies to workers in that state. Running payroll on a schedule that violates state law can trigger penalties even when every employee was ultimately paid the correct total.
Final Paychecks
Federal law does not require immediate payment when an employee leaves. Under the FLSA, the final check can wait until the next regular payday.6U.S. Department of Labor. Last Paycheck Many states impose much shorter deadlines, from immediate payment at termination to within a few business days. Penalties for missing a state-mandated deadline can be steep, in some states reaching the equivalent of the employee’s daily wages for every day the payment is late. On a 1st-and-15th schedule, “next regular payday” can be up to about two weeks out, which is exactly the gap state law often narrows.
Unused vacation and PTO payouts add another layer. Federal law does not require payout of accrued vacation; whether you owe it depends on company policy or the employment agreement.7U.S. Department of Labor. Vacation Leave Some states require vacation payout by law, and if a written policy promises it, state regulators will enforce that promise regardless of federal silence.