Moving From Semi-Monthly to Bi-weekly by: Best Business Payroll
Yes, you can certainly switch from semi-monthly to bi-weekly payroll, and you are smart to make the switch at the beginning of the calendar year. The good news is that it is easier to "sell" the idea of changing pay frequency to your employees moving from semi-monthly to bi-weekly than the other way around--employees would rather be paid more frequently than less.
When changing the period-begin and period-end dates just make sure that for the first pay period you adjust the period-begin so it lines up with the end of your previous pay period.
For example, if you currently pay on the 15th and the 30th, make the period-begin day of your new pay period December 31st, then make the first period-end date of 2012 some time the week of January 9th.
For example, if you decide to make your new pay day every other Thursday, that will make the first pay date of 2012 Thursday, January 12th, for a period-begin date of December 31st and a period-end date of January 12th. This will give you 13 days in this pay period as you adjust to your new system; you will then move to paying bi-weekly every other Thursday.
Even if you have employees work on December 31st (in 2011), the IRS only cares about the actual date of pay, so for tax purposes, any work done 2011 but paid in 2012 counts as income for 2012.
