Salary job question (1 Viewer)

Super2510

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I have never had a salary job. My question is about how bi-weekly check amounts are determined.
From what i was told you take the annual salary and divide by 26. But what if business year starts in January and you started in March. You don't have 26 pay periods to get your full annual salary. So would 2 people making same annual salary but one started January 1st and Other March 1st have differing paychecks with all other things being equal. Would the person who started in March have a larger check every two weeks than the person who started in January because there is fewer pay periods to get the person who started in March their full salary for the year than the person that started in January? Basically is the paycheck determined by how many pay periods there are within the year to get the person their salary for the year?
 

GrayMatter78

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I haven't heard of being pro-rated salary if starting after the first of the year so not sure how to answer that. I'd think the person starting Jan 1 and the person starting Mar 1 would get the same rate. The person starting later just wouldn't realize the total salary for that year.

I'd imagine you still have an hourly rate determined by salary/hours available in year. Then you'd be paid 80 hours (for bi-weekly) of that rate.

Salary = 65,000
Hours available (year total) = 2080

65,000 / 2080 = $31.25 (x 80) = $2500 before taxes, etc.
 

soupcan dan

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it's just one of many ways you'll be screwed over in a salary job. wait until the holidays or layoffs of the hourly employees happen----- you'll have a few more questions.
 

Saintaholic

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I have never had a salary job. My question is about how bi-weekly check amounts are determined.
From what i was told you take the annual salary and divide by 26. But what if business year starts in January and you started in March. You don't have 26 pay periods to get your full annual salary. So would 2 people making same annual salary but one started January 1st and Other March 1st have differing paychecks with all other things being equal. Would the person who started in March have a larger check every two weeks than the person who started in January because there is fewer pay periods to get the person who started in March their full salary for the year than the person that started in January? Basically is the paycheck determined by how many pay periods there are within the year to get the person their salary for the year?
I'd imagine that since you started the year late, you won't be paid for a full year.

Let's say you're making $40k. Do you feel as though you should get a full $40k for working only 9 months while your co-worker gets paid his $40k and he's been there the entire year?

I'm thinking you'd get paid the bi-weekly $40k (or whatever) rate of $1538.46 (or whatever). Then next year, when you work a full year and have earned it, you'll make the full salary.
 

St4ever

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I've been on salary for 22 years and went throu a bi-monthly pay period change to bi-weekly pay period.

Bi -weekly salary is determined by dividing the yearly salary by 26 weeks. That determines your weekly pay. It does not change for when you started. You have to work a full year to reach your total yearly salary. So if you started in March your total salary at the end of the year would reflect only 10 months of pay. Your following year would show a total of 12 months of pay since you had finally worked a full year Jan-Dec.

Some people get it confused when they get their W-4 forms at the end of the year that is short of the two months thinking they should reflect what they were told they were getting in a yearly salary. You have to work a full 12 months in order to get paid for the year and it's a rare occasion for someone to start a new job at the beginning of the year.
 

Grandadmiral

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I haven't heard of being pro-rated salary if starting after the first of the year so not sure how to answer that. I'd think the person starting Jan 1 and the person starting Mar 1 would get the same rate. The person starting later just wouldn't realize the total salary for that year.

I'd imagine you still have an hourly rate determined by salary/hours available in year. Then you'd be paid 80 hours (for bi-weekly) of that rate.

Salary = 65,000
Hours available (year total) = 2080

65,000 / 2080 = $31.25 (x 80) = $2500 before taxes, etc.
I've been on salary for 22 years and went throu a bi-monthly pay period change to bi-weekly pay period.

Bi -weekly salary is determined by dividing the yearly salary by 26 weeks. That determines your weekly pay. It does not change for when you started. You have to work a full year to reach your total yearly salary. So if you started in March your total salary at the end of the year would reflect only 10 months of pay. Your following year would show a total of 12 months of pay since you had finally worked a full year Jan-Dec.

Some people get it confused when they get their W-4 forms at the end of the year that is short of the two months thinking they should reflect what they were told they were getting in a yearly salary. You have to work a full 12 months in order to get paid for the year and it's a rare occasion for someone to start a new job at the beginning of the year.
These are both correct. Your salary isn't prorated; you will be paid for the remaining pay periods in the year. Depending on the way your job's pay calendar is set up and when you start, you might be getting three checks in March.
 

superchuck500

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These are both correct. Your salary isn't prorated; you will be paid for the remaining pay periods in the year. Depending on the way your job's pay calendar is set up and when you start, you might be getting three checks in March.
The whole issue is semantic, but it is effectively pro-rated if viewed through the lens of what an annual salary is. If you're paid based on $X per year, but you only work 9 months, you will only earn 75% of $X/yr . . . which is a pro-rata formula.

But the bi-weekly paychecks will still be the same amount as the person who is there for the whole year on the same salary . . . but that person makes up the difference in the extra pay periods that make the difference between 9 months and 12 months.
 

UncleTrvlingJim

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The simplest way to think about it is your salary is based on a year of work. If you start on March 1, your year ends after February 28. So your paycheck is divided up evenly over that year.
 

Craigj

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I'm accountant who is also paid salary. If two people make the same salary they will have the same paycheck every pay period no matter when they start. For example Joe and Jane make 50K a year. Joe started Jan 1 his check will be $1923 (50K/26=$1923). Jane starts March 1. Jane's check will be the same no matter when she starts. She will just get less of them because she didn't work for 2 months.
 

staphory

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Had a salary job one time, never again. Working 70 hours without just compensation ain't my idea of living.
My wife had a salary job last year. They expected a minimum of 55 hours a week but really wanted a commitment for 60. She tried. She really did. She just couldn't stick with it and when they wanted to give her responsibility for even more work without a raise, she found another job. They were paying just over 41K a year.
Some of these companies are out of their minds.
 

Grandadmiral

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DoL tried to modify the OT rules to help those exempt (i.e., "salaried") employees so that more would qualify for overtime. Business industry and red states went bat-**** crazy and the courts (Texas, of course) put a stop to it.
 

guidomerkinsrules

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DoL tried to modify the OT rules to help those exempt (i.e., "salaried") employees so that more would qualify for overtime. Business industry and red states went bat-**** crazy and the courts (Texas, of course) put a stop to it.
This would have screwed me if it went into effect - I wouldn't have had nearly the family time flexibility I have no and no way they were going to pay overtime
I would wind up doing more work in less time or get in trouble when stuff didn't get done
In general I agree with the principle, but I would not feel the benefit
 

Grandadmiral

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This would have screwed me if it went into effect - I wouldn't have had nearly the family time flexibility I have no and no way they were going to pay overtime
I would wind up doing more work in less time or get in trouble when stuff didn't get done
In general I agree with the principle, but I would not feel the benefit
We just reclassified the affected employees to non-exempt and made them all hourly. We still allow OT when necessary, but they flex their schedules most of the time.
 

DCSaints_Fan

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I was actually non-exempt but my promotion put me to exempt (salaried). I got paid twice a month regardless - roughly the 7th and 22nd of the month. My paycheck does not always have the same amount but it does list my annual salary so in terms of loan applications, etc. there is no question to how much a make yearly.

I think what they do is convert from salary to an hourly wage based on # of days you are expected to work per year plus holidays, then on your time card, they simply pay your hourly wage for however many hours you report.

I used to be in the mortgage business, and you had alot of people that were paid biweekly (every two weeks) and not bimonthly (twice a month)*. They always wanted to structure their mortgage payments to align with their paychecks, and all we could tell them was that it was a servicing arrangement to be made after the loan was closed. but that turned alot of people away because they literally wanted to structure the trust to say 'biweekly' somehow, which I've never seen.. perhaps some big lenders which were also mortgage servicers were able to include paperwork that had some biweekly payment agreement, but we were a small operation (basically brokers)

* Curiously, It should really be 'semi-monthly' since 'bimonthly' should literally mean 'every two months', but I guess people are lazy, and so the meaning depends on the context. In other contexts like publications in can also mean 'every two months'
 

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