How to Calculate Bi-Weekly Salary to Hourly
Many employers pay workers on a biweekly or semi-monthly basis. For employees paid at an hourly rate, payroll calculations are processed by multiplying the number of hours worked by the hourly rate of pay. When an employee is salaried – meaning paid a fix amount per year, such as $50,000 – the amount is split across the number of pay periods. Twenty-six paychecks per year are issued to employees on a biweekly payment schedule, while those on a semi-monthly schedule receive 24 checks. Calculating the amount of pay due a biweekly employee is a simple division problem.
Tip
Convert a biweekly salary to an hourly rate of pay by dividing the gross pay by the number of pay periods in the year and a work week of 40 hours.
Base Numbers for Calculation
To start a calculation, you need to establish a few base numbers: annual salary, pay periods per year and number of hours worked per week. For a salaried worker on a biweekly schedule, there are 26 periods and 40 hours worked per week. Annual salary equals the gross annual pay for an employee. Do not deduct the cost of benefits.
Doing the Math
For an employee with a gross annual salary $50,000, you can divide by 26 and reach a per paycheck amount of $1,923.08. Next, divide this biweekly pay amount by the number of hours worked. Multiply 40 hours by two weeks in the pay period. Eighty hours divided into $1,923.08 equals a gross pay rate of $24.04 per hour.
Additional Benefits Calculations
When computing payroll, the cost of benefits must also be applied on the basis of biweekly pay. If the employee portion of a monthly healthcare premium is $200, the premium would be divided across multiple pay periods. At a glance, it would seem the payroll deduction would equal $100 per paycheck, but biweekly employees are paid 26 times per year. At $200 per period, the worker would end up paying $200 extra per year for insurance. Instead, the cost of the monthly premium needs to be multiplied by 12 months to reach $2,400. The total annual cost of the insurance, $2,400, would then be divided by 26 to reach a biweekly payroll deduction of $92.31.
Benefits Tied to Pay
Benefits tied to the amount of pay, such as percentage of 401(k) contributions or payroll taxes, are less complicated. A 5 percent contribution to the 401(k) would be based on gross pay during the pay period, while income tax withholdings would also be assessed on gross pay minus select contributions. Other premiums, such as health savings account contributions, dental plans or eye insurance, may assess a flat fee per pay period. These withholdings would be subtracted from the gross pay.
References
Resources
Tips
- You may calculate biweekly gross by dividing annual salary by the number of days the salary is based on for the year and multiplying the result by 14 days. For example, $52,000/365 days = $142.47 x 14 = $2,000.
- Gross represents your entire salary before deductions.
- A leap year has 366 days; therefore, over the course of several years, you may have 27 biweekly pay periods for the year.
Writer Bio
Ashley Adams-Mott has 12 years of small business management experience and has covered personal finance, career and small business topics since 2009. She is a full-time government and public safety reporter and holds a BSBA in accounting from Columbia College. Her work has appeared online with USA Today, The Nest, The Motley Fool, and Yahoo! Finance.