A semi-monthly payroll may present confusing payroll situations.
A semi-monthly payroll involves processing 24 paychecks annually. Instead of paying employees 26 biweekly checks, a company may reduce costs by using a semi-monthly payroll. When you employ non-exempt employees, you must pay your workers overtime pay according to the Fair Labor Standards Act. Determine overtime pay on semi-monthly hourly payrolls to pay employees accurately and fairly according to federal guidelines.
Instructions
1. Set a fixed workweek for your employees. The workweek does not change -- it is a regular and recurring 168-hour period that includes seven consecutive 24-hour periods, according to the U.S. Department of Labor.
2. Record the working hours of the employees throughout the fixed workweek from the first hour of the workweek to the last hour of the workweek. You must pay any employees who work more than 40 hours during the workweek at least a time-and-a-half hourly rate.
3. Calculate the employee payroll after each workweek ends. When a complete workweek begins and ends within the payroll period, multiply each employee's regular rate of pay by the number of hours worked. For example, if an employee worked 44 hours and earns $12 an hour, multiply: 44 x 12 = 528. Multiply the overtime hours by 0.5 to calculate overtime hours (4 x 0.5 x 12 = 24. Add the regular wages and the overtime wages to arrive at the weekly wages: 528 + 24 = 552. The employee earns $552 for this week.
4. Calculate the first half of a partial workweek when the end of a payroll period interrupts the week. When a pay period includes the first half of a week, include the employee's regular rate of pay. For example, if the employee works three 10-hour days earning $12 an hour at the end of the pay period, multiply 10 x 12 x 3 = 360. The employee earns $360 for this partial workweek.
5. Figure the latter half of a partial workweek when a payroll period begins midweek. If the employee works two 10-hour days to complete the workweek, this makes the workweek total 50 hours (10 hours of overtime). Calculate the regular rate first by multiplying: 10 x 12 x 2 = 240. This is the regular earnings for the remaining part of the workweek. Calculate the overtime rate by multiplying: 10 x 0.5 x 12 = 60: The employee earns $60 in overtime for this workweek. Add the regular earnings to the overtime earnings to total the weekly earnings: 240 + 60 = 300. The employee earns $300 for this partial workweek.
6. Add the complete workweeks and the partial workweeks as you calculate the payroll. Using the same example, if a pay period included one complete workweek, a partial workweek that did not include overtime and a partial workweek that did include overtime, add: 552 + 360 + 300 = $1,212. The employee's semi-monthly paycheck should be $1,212.
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