A semi-monthly payroll occurs twice per month.
A semi-monthly payroll is more complex than a weekly or biweekly payroll. A weekly and a biweekly payroll occurs each week and every other week, respectively. But semi-monthly employees are paid on the 15th and on the last day of the month. To ensure accurate and timely semi-monthly paychecks, it is critical that you understand calculate the payroll.
Instructions
1. Determine hourly employees' pay period dates. To allow sufficient time for payroll processing, hourly semi-monthly workers are usually not paid up to the semi-monthly pay date. Instead, the employer assigns a deadline, such as four days prior to the actual payday. To process hourly semi-monthly employees' pay, you must know the pay period start and end date.
2. Use hourly employees' time card/timesheets to determine hours worked within the pay period. Timesheets are usually submitted weekly, regardless of the pay frequency. Figure the employees' regular, overtime and other pay, such as vacation and sick time, based on their time cards.
For instance, say the employee earns $11 per hour. He submits two weekly time cards during the semi-monthly pay period. Each indicate Monday through Friday 7 a.m. to 5 p.m. Subtract one hour for unpaid lunch. Pay the employee 40 regular hours and five overtime hours. Calculate straight-time gross pay: 40 hours x $11 = $440. Then, calculate overtime gross pay: 5 hours x $16.50 ($11 x 1.5) = $82.50. Total gross pay: $440 + $82.50 = $522.50.
Note that overtime applies to hours worked in excess 40 hours in a given week. Pay overtime hours at the employee's overtime rate, which is one and a half (1.5) times his regular pay rate.
3. Figure salaried semi-monthly pay. Salary workers are typically paid the same wage each pay date, unless there has been a pay raise/adjustment or a change in deductions. Furthermore, salaried employees are generally paid current, up to the actual payday. For instance, say the employee's annual salary is $55,000. Calculation: $55,000 / 24 semi-monthly pay periods = $2,291.67, gross semi-monthly pay.
4. Subtract involuntary deductions from employees' gross pay. Use the IRS' Circular E and the employee's Form W-4 to determine the federal income tax. If state income tax applies, use his state tax form and the state withholding tax tables to figure the tax. For Medicare and Social Security tax, consult the IRS' Circular E for the appropriate tax year to figure the percentages. For 2010, the Medicare rate was 1.45 percent of all gross income. The Social Security rate was 6.2 percent of gross income, up to the yearly maximum limit of $106,800. For wage garnishments, consult the court-ordered document for withholding instructions.
5. Subtract voluntary deductions, such as medical, dental, life, and disability insurance and retirement benefits. The deduction amount is based on the employees' pay twice per month. Insurance rates vary and are based on the employer's rates from the carrier. Retirement contribution also varies. For instance, the employee may elect to have five percent of his gross semi-monthly pay go toward his retirement benefit.
Tags: instance employee, percent gross, actual payday, biweekly payroll, gross hours