Expert: Shirley McAllister, CPP, PHR - 7/29/2009

Question
I live in the state of Texas.  Where I work, we get paid biweekly...26 times a year.  Our health insurance is taken out each pay period.  Is it legal to deduct it 26 times a year?  I though it was based on a monthly charge so it should only be deducted 24 times a year.

Answer
We also deduct our insurance payments 26 times a year. I take the total amount of the annual insurance payment for each employee and divide it by 26. This is much less each pay period than it would be if I took it out 12 times or 24 times a year.

If the insurance payment is 600.00 a month for each employee than I take the 600 x 12 to get 7200.00 then I divide it by 26 to get a payroll amount of 276.92.

If I took it out 24 times a year it would be 7200.00 divided by 24 which would be a payment of 300.00 each pay period.

Find out how much it costs a month for your premium take it times 12 and divide it by 26 and see if you are paying the correct amount. It does not matter how many pay periods it is held out as long as you are paying the correct amount.

Shirley