Is my company taking the right amount out of my paycheck?
Q. I have a weird suspicion that I am not being paid the salary my company offered me last April. My company offered me $40,000 a year, but when I do the math based on my paychecks, the amounts don't add up to $40,000, but more like $36,000. I am paid every second Thursday and before taxes, my paycheck is $1,538.46 (the same every week). Is there a calculation I can use to see if this actually adds up to $40,000 after one year?
A. Your company is not withholding funds.
There are a number of ways companies can pay annual salaries to their employees. Some companies pay once a month, which means employees receive 12 paychecks during the year. Other companies pay their salaries every other week,
which means employees receive 26 pay checks each year. Other companies pay their employees twice every month, which means employees receive 24 paychecks in the course of 12 months.
It sounds as if you are paid 26 times per year, or $1,538.46*26 = $39,999.96. (Presumably the remaining four cents will be paid at various intervals, or all at once in a slightly different paycheck.)
Note that when you're paid biweekly, it means twice a year you'll receive three paychecks in the same month.
If you are unclear about the number of times your company pays you, I encourage you to talk to your local HR representative or contact your payroll department to find out when and how many times you are paid during a 12-month period.Source: www.salary.com
Category: Personal Finance