Pay Periods – Hourly Rate Finance Unit

Working for a Living

Vocabulary – Pay Periods Weekly – 52 times a year; payday on same day each week Bi-weekly – 26 times a year; payday on same day every 2 weeks Semi-monthly – 2 times a month; usually on the 1st and 15th Monthly – 1 time per month; paid last day of month usually Direct Deposit – paycheck automatically deposited into bank account on pay day. Hourly employees – paid by the hour; get 1.5 time hourly rate if work over 40 hours per week.

Example 1 Christina is paid bi-weekly. Her annual salary is $37,000. What is her biweekly salary? Answer: 37,000/26 = Gross $1, 423.08 The Advantages of Paying Employees Biweekly Instead of Weekly by Grace Ferguson, Demand Media Traditionally, employers establish weekly, biweekly, semimonthly and/or monthly payrolls. A weekly payroll occurs once per week, and a biweekly payroll happens every two weeks. Biweekly employees receive a larger amount of pay each payday than weekly employees do. Paying employees biweekly instead of weekly can benefit the employer as well.

Example 2 Manny is paid semimonthly. His semimonthly salary is $1,239. What is his annual salary? 1,239 x 24 = 29,736 Payroll Frequency The main difference between a biweekly and semimonthly payroll is that biweekly happens every two weeks while semimonthly occurs twice per month, such as on the 15th and final day of the month. An employee knows when each biweekly payday will happen, such as every other Friday; however, semimonthly paydays are not as easy to predict as they may fall on different days of the month. Depending on the month, payday may happen on a Saturday, Sunday or holiday. In this case, employees with direct deposit generally receive payment on the preceding business day. Biweekly employees usually receive 26 paychecks per year; semimonthly employees receive 24.

Example 3 and 4 Maureen works at Burger World. Her hourly wage is $9.70. If she works 40 hours per week, what is her regular weekly gross pay? What is her annual pay? 9.70 x 40 = 388 Gross Pay 388 x 52 = 20,176 Annual Pay If Maureen works overtime, she is paid 1.5 times her hourly rate. What is her overtime rate? 9.70 x 1.5 = $14.55

Example 5 Janice makes $10 per hour. She gets paid 1.5 times her hourly rate for overtime. If Janice works 45 hours this week, what is her total pay? Regular time: 10 x 40 = 400 OT Rate: 10 x 1.5 = 15 5 x 15 =75 Regular: 400 OT: + 75 = 475

Example 6 Samantha worked 47 hours last week. She was paid 40 hours at her regular hourly rate and 7 hours at her overtime rate (1.5) times. Her gross pay for the week was $611.05. What was her hourly rate? Let x = hourly rate Regular pay + Over time pay = 611.05 40x +7(1.5x) = 611.05 40x +10.5x = 611.05 50.5x = 611.05 X=12.10