February 19, 2026
Payroll is typically the largest recurring expense in a private dental practice and plays an outsized role in cash flow stress.
Many practices operate on a bi-weekly payroll without realizing that the schedule itself creates unnecessary volatility. A semi-monthly payroll structure can smooth cash flow, simplify planning, and align payroll with how most other expenses are paid while keeping employee compensation the same.
This article explains why many dental practices switch from bi-weekly to semi-monthly payroll, what employees notice when the change happens, and how to implement the transition without confusion or mistrust.
Bi-Weekly vs. Semi-Monthly Payroll: What’s the Difference?
Bi-weekly payroll (every 14 days):
- 26paychecks per year.
- Most months have 2 paychecks.
- Two months each year have 3 paychecks.
- Those third-paycheck months often create short-term cash pressure, even in otherwise healthy practices.
Semi-monthly payroll (twice per month):
- 24 paychecks per year.
- Paidon fixed dates (commonly the 1st and 15th, or the 15th and last day of the month).
- Exactly 2 payrolls every month.
- No calendar-driven surprise payrolls.
Simple way to picture the difference:
- Your annual pay is the same “pie.”
- Bi-weekly payroll slices it into 26 pieces.
- Semi-monthly payroll slices it into 24 pieces.
- The pie itself does not change.
Why Dental Practices Should Switch to Semi-Monthly Payroll
Dental practices rarely experience perfectly even cash flow. Insurance reimbursement, timing, seasonal production shifts, holidays, lab bills, and supply costs all contribute to month-to-month variability.
Bi-weekly payroll disrupts planning because payroll expenses spike twice per year without warning in a monthly budget. Semi-monthly payroll removes that volatility by locking payroll into a predictable twice-monthly rhythm.
For practice owners, this creates more consistent operating cash flow, fewer emergency transfers, and easier alignment between payroll, rent, loans, and credit card payments. Importantly, these benefits come without cutting wages or reducing benefits.
What Employees Typically Notice (and Why It Can Feel Negative at First)
Even when annual pay stays exactly the same, employees often react emotionally to payroll changes. Most concerns stem from unfamiliar timing rather than actual financial loss.
1) Pay dates change
Instead of “every other Friday,” you’ll see set pay dates twice per month.
2) Paycheck amounts are usually larger
You’re receiving the same annual wages over fewer checks, so each check is typically larger on average.
3) Hourly checks can vary by pay period
Semi-monthly pay periods don’t line up perfectly with weeks, so one half-month may include more workdays/hours than another.
4) Some deductions may change per check
This is the most common source of confusion and suspicion, especially benefit deductions.
Payroll Example: Same Annual Pay, Different Timing
Consider an employee who works 32 hours per week at $20 per hour, contributes 4 percent to a traditional 401(k), and has health insurance withheld pre-tax under a Section 125 plan.
Annual gross pay (the anchor):
- 32 hours per week × $20 per hour = $640 per week.
- $640 per week × 52 weeks = $33,280 per year.
- This annual gross does not change based on payroll frequency.
Bi-weekly payroll (26 checks per year):
- Gross per paycheck: $33,280 ÷ 26 = $1,280.00.
- 401(k)contribution (4%): $51.20 per check.
- Health insurance (Section 125): $100.00 per check.
- Total pre-tax deductions: $151.20 per check.
- Pay after pre-tax deductions (before taxes): $1,128.80.
Semi-monthly payroll (24 checks per year):
- Average gross per paycheck: $33,280 ÷ 24 = $1,386.67.
- 401(k) contribution (4%): $55.47 per check.
- Health insurance annual total: $2,600 ÷ 24 = $108.33 per check.
- Total pre-tax deductions: $163.80 per check.
- Pay after pre-tax deductions (before taxes): $1,222.87.
Year-end comparison:
- Annual gross pay: $33,280.
- Annual 401 (k) contributions (4%): $1,331.20.
- Annual health insurance premiums: $2,600.
- Same annual earnings and deductions, only the timing and per-check amounts change
Why TaxesWithheld May Look Different
Payroll systems calculate withholding based on pay frequency and annualized assumptions. When pay frequency changes, withholding per paycheck may shift even if annual tax liability remains similar. The correct way to evaluate the impact is by reviewing year-to-date totals rather than comparing a single paycheck.
What Changes and What Usually Does Not
Hourly wages, percentage-based retirement contributions, and payroll taxes generally adjust automatically. Benefit premiums and other deductions tied to monthly or annual costs often change per paycheck but remain the same annually.
A quick checklist: what’s most impacted by changing the number of checks
Usually stays aligned automatically
- Hourly wages (rate × hours).
- 401(k)contributions are set as a percentage.
- Payrolltax calculations are tied to wages.
Often changes per check but stays the same annually
- Health, dental, and vision premiums (Section 125).
- Other benefits with monthly/annual premiums.
Needs attention if set as a flat dollar amount per paycheck
- 401(k)set as $___ per paycheck (not a %).
- Some voluntary deductions.
- Some garnishments/orders depending on the terms.
How to Implement Semi-Monthly Payroll Successfully
Start by selecting pay dates and deciding how holidays and weekends will be handled. Most practices choose the nearest prior business day for consistency.
Define pay periods clearly, typically the 1st through the 15th and the 16th through the end of the month. Establish timecard cutoffs for hourly employees and confirm that overtime is still calculated based on the defined workweek.
Before making the switch, audit all deductions that are configured on a per-paycheck basis. Adjust benefit premiums, retirement contributions, and other deductions so annual totals remain accurate.
Plan the transition paycheck carefully. Many practices use a one-time bridge period or alignment check to move from bi-weekly to semi-monthly without confusion. Clear communication around dates and covered work periods is critical.
Frequently Asked Questions
Is semi-monthly payroll a pay cut?
No. If your hourly rate and total hours worked stay the same, your annual gross pay stays the same. Pay frequency only changes how that total is divided across the year.
Why did my insurance deduction go up?
Because the same annual premium is being collected over 24 checks instead of 26. The annual total typically stays the same.
Will my 401(k)change?
If your 401(k) is a percentage of pay, it stays aligned with your wages. If it’s a flat dollar amount per check, you may want to update it so you still hit your annual goal.
Why do semi-monthly paychecks vary for hourly employees?
Because semi-monthly pay periods don’t always include the same number of workdays/hours. Over the year, totals reconcile to hours worked.
What if my personal budget is built around bi-weekly?
A good adjustment is to budget by monthly bills rather than “checks,” and split the monthly bills across the two semi-monthly checks.
Communicating the Change to Your Team
Effective communication determines whether the transition feels reasonable or disruptive. Employees need to hear clearly that this is not a pay cut, that hourly rate sand annual earnings do not change, and that the differences in deductions are mathematical rather than financial losses.
Providing a short FAQ, written examples, and optional pay-stub walkthroughs significantly reduces anxiety. Most resistance disappears once employees see the full-year math.
Switching from bi-weekly to semi-monthly payroll is one of the simplest structural changes a dental practice can make to improve cash-flow stability. When implemented thoughtfully and communicated clearly, it strengthens the practice's financial predictability without reducing the team's compensation.
Not sure where to start? Contact us today!
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