In private industry, more than 42 percent of businesses used biweekly salary payments in 2019. About 19 percent used semimonthly payroll and just more than five percent paid employees monthly. The federal government also uses a biweekly schedule for most people on its payroll. Scheduling payments based on 52 weeks per year, biweekly pay results in 26 paychecks per year. When you need to calculate monthly income based on biweekly pay, you'll be able to choose from several methods, with some more precise than others.
Biweekly Salary Basics
Most employers that use biweekly payroll calculate your payment by dividing your annual salary by the number of weeks in the year. It's helpful to know this method anticipates that you will be paid for two full weeks of work each time you receive your pay. Your employer bases your annual salary on the 40-hour workweek. So, generally your biweekly salary covers your pay for 80 hours.
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If your annual salary is $52,000, your employer will pay you $2,000 each biweekly pay period. The start and end of your biweekly pay period aren't necessarily Monday through Friday. Due to the way that the 52 weeks flow across the yearly calendar, most employees receive an extra biweekly salary payment for two months each year.
Convert Biweekly Salary to Monthly
Because the annual calendar creates an extra paycheck twice a year for biweekly payroll, you can't use the number of months in a year to determine your monthly salary accurately. Dividing your annual salary by 12 will only give you a close estimate that is likely to be less than what you receive from your biweekly paychecks in most months.
Using your annual salary, most employers simply divide your payments into 26 equal amounts, for two weeks. Therefore, you receive less money per pay period than someone whose payments are simply divided by the number of months per year.
To calculate gross monthly income biweekly, you'll need to do a little math. Divide 26 by the number of months in a year. Then, multiply the result of 2.17 by the amount of one biweekly payment to calculate your monthly income.
Leap Year Biweekly Pay
Although you might not notice it immediately, a leap year usually creates a 27th pay period in a biweekly salary schedule. It's necessary to make a correction to our annual calendar of 365 days by adding an extra day to February in a leap year. If your employer calculates your biweekly salary by dividing your annual salary by 27 instead of 26, to accommodate the extra pay period, you'll receive less money each biweekly pay period for an entire year. However, your total biweekly salary payments will still equal your annual salary.
If your employer doesn't change the way they calculate your biweekly pay, lucky you. The total of 27 biweekly payments you receive will exceed your normal annual salary.
Federal Biweekly to Monthly Pay
When the federal government pays you biweekly, it uses a slightly different formula than businesses commonly do. To establish your biweekly salary payments, the government first calculates your hourly rate using your annual salary. Their formula then divides your annual salary by 2,087 to arrive at your hourly rate.
Your biweekly payment is calculated at 80 hours times the hourly rate obtained using your annual salary. Your monthly salary calculation doesn't change, but it is more accurate than the method that divides your salary into 26 payments.
Biweekly Salary and Hourly Pay
When your salary is based on an hourly amount, and your employer pays biweekly, they don't divide your annual salary by 26 weeks. Generally, each workweek equals 40 hours. So, your employer simply adds the two weeks together to calculate the amount due to you for 80 hours worked. Once you know the amount that you receive each pay period, to calculate your monthly salary, you'll multiply your biweekly pay by 2.17.
If you don't work full-time 80 hours per biweekly pay period, you need to calculate gross monthly income biweekly by using the total scheduled hours you work each week. Since each month doesn't have exactly four weeks, multiply your weekly total by 4.3. Because some months have more weeks than others, this is the average number of weeks per month.
If your scheduled hours fluctuate widely, calculate your average weekly total hours first. Multiply the weekly average by 52 to estimate your expected annual salary. Then divide the annual estimate by 12. This is not as accurate as the other method, but your estimate will come close enough for monthly budgeting.
Biweekly Vs Semimonthly Pay
While the biweekly salary schedule is most common, some employees and employers prefer semimonthly payments, with good reason. Employers who use semimonthly salary payments make payroll payments on two specific dates per month. They still need to divide your annual salary to calculate your payroll.
However, if you get paid 24 times per year, your monthly salary is simply double the amount you receive on each date. There are no extra payments to consider or add in.
For employers, semimonthly salary payments require knowing when certain holidays will occur on a scheduled pay date and adjusting the schedule accordingly.
Use of Math Shortcuts
Biweekly salary and semimonthly salary payments both assume that you work 40 hours each week, and you get paid for 80 hours each pay period. Take a shortcut and find your hourly salary rate by using the federal formula. Then calculate monthly salary, using semimonthly basis of payment for two weeks at 40 hours each. Multiply your hourly rate by 80 hours to get an average that will be close to any other biweekly salary conversion formula.