What is the effect on my gross payroll?
There is no change to the employee’s annual salary. However, payroll payments will be based on 26 bi-weekly pay cycles per year rather than 12 monthly pay cycles. In ten months of the year there are 2 bi-weekly payroll payments per month. In two months of the year, one in the spring and one in the fall, there are 3 bi-weekly payroll payments. In order to calculate gross bi-weekly payroll, annual salary should be divided by 26. Multiply this resulting amount by 2 to calculate new monthly gross. Example of Monthly Gross: Annual Gross: $36,000 Current Monthly Gross: $ 3,000 Bi-weekly Gross: $ 1,384.62 New Monthly Gross: $ 2,769.24 for 10 months per year $ 4,153.86 for 2 months per year Although the new monthly gross is less than the current gross, there are 2 additional bi-weekly payroll payments per year. The monthly gross for those months using the example above is: $4,153.86. This additional payment can be used to manage cash flow throughout the year. The first month that this happens
