Question We are paid bi-weekly. Our company has always withheld benefit deductions out of 24 pay periods instead of the 26. This year the Accounting dept decided to change this and begin withholding benefits deducts out of 26 pay periods. This is fine if someone is employed all year; however I wonder about new hires and how this effects their pay. For instance EE is hired April 14th and their benefits become effective May 1st. They elect Employee child health insurance at $232.00 per month. This comes to 107.08 per pay (232.00x12/26). The month of May happens to have three payrolls (May 2, 16 and 30th). This new hire would actually pay 321.24 for health ins for the month of May. If you figure the entire year (May-Dec) 232.00 x 8 months=1856.00; however if we withhold 107.06 per pay x18 remaining pay periods new hire would pay 1927.44 instead of only $1856.00. How is this fair? How can it be remedied?
Thank you for your time
Answer Hi Mary,
When I have a new hire I take his insurance amount which yours would be 232.00 per month. so if you have 8 months left May-Dec you would take 232.00 x 8 for a total of 1856.00. Now you have 17 payperiods left so you would divide the 1856.00 by 17 for a total of 109.18 which would be taken out every payperiod for this employee. Than you can fix it next year for the 26 payperiods next year.
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Thank you for your quick response. We can manipulate our system to allow for this modification.
Again thanks a million!
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