Google Answers Logo
View Question
 
Q: Payroll Creep ( Answered,   1 Comment )
Question  
Subject: Payroll Creep
Category: Business and Money > Finance
Asked by: onetobehold-ga
List Price: $5.00
Posted: 20 May 2005 16:03 PDT
Expires: 19 Jun 2005 16:03 PDT
Question ID: 523888
How/why does the payroll creep (27th payroll) occur and how will it
effect my paycheck.  I work in a school district usually on 26 pays
and I'm looking for an easy to uderstand explaination.
Answer  
Subject: Re: Payroll Creep
Answered By: denco-ga on 20 May 2005 21:13 PDT
 
Howdy onetobehold-ga,

This Boise State University PDF file has a great explanation of the
"27th Payroll" anomaly.
http://hrs.boisestate.edu/payroll/FAQ_27th_Payroll.pdf

"What is the 27th Payroll?

The 27th payroll is an anomaly to the bi-weekly pay schedule caused by
calendar creep that cycles every eleven years. The last 27th Payroll
occurred in Fiscal Year 1995. The next one is FY 2006. A 'normal'
bi-weekly pay year consists of 26 pay periods. However, due to the
difference in timing between two-week pay periods, a 365 day calendar
and the additional days for leap year, every eleventh pay year contains
a 27th pay period.

Will my annual salary be reduced because of the 27th Payroll?

No. Your annual salary will not be reduced because of the 27th payroll.
However, for the employees that are contracted to work a specific number
of days but less than the full year and have their pay prorated over the
full hear, their bi-weekly paychecks will be slightly reduced, as described
below.

How will the 27th Payroll affect me?

If you are on a 12 month work schedule, you will work an additional two
weeks and will be fully compensated for that work.

If you work less than 12 months but have your annual salary paid over 12
months, you will see a slight drop in your bi-weekly paychecks but only
because your annual salary will be divided over 27 pay periods rather than
the standard 26. Again, everyone will be paid their full annual salary.

Is the 27th Payroll a ?bonus? for 12 month employees that is not available
for those who work less than 12 months?

No. Twelve month employees will work 27 two-week pay periods in FY06. They
will get paid for time worked. This is not a windfall of any sort."

Your school district might be handling it a bit differently from how Boise
State deals with it, but their approach seems to be typical as long as
funding is in place for it.  The timing might also be different for you
as well as it should occur 11 years after the last "27th Payroll" happened
in your school district.

From my reading of your situation, when it does happen, you might get 27
paychecks instead of 26, but each one will be for around 4% less than usual,
leaving your total annual salary the same.

If you need any clarification, please feel free to ask.


Search strategy:

Google search on: "27th Payroll"
://www.google.com/search?q=%2227th+Payroll%22

Looking Forward, denco-ga - Google Answers Researcher

Request for Answer Clarification by onetobehold-ga on 21 May 2005 06:47 PDT
I had found that info also, but when I was searching I also came
across another anwer concerng exactly what happens in our calendar
system to cause this "creep".  I printed it and closed out but didn't
get the text, only the pics, and now I can't find it again.  It went
into detail such as nonleap years have X amount of days and then a
leap year adds X and after X years you are left with X-something to
htat effect, but I didn't read it closely so I don't know.  I was
hoping someone would uncover that piece again.

thanks for trying

Clarification of Answer by denco-ga on 21 May 2005 13:10 PDT
Howdy onetobehold-ga,

The reason/formula is pretty straight forward.  If we take the number of days
in a standard year (365) and divide it by 14 (the number of days in 2 weeks)
we get (rounded) the result of 26.071429 two week periods in a regular year.
If we do the same for a leap year at 366 days, we get the result of 26.142857
two week periods.

In any 11 year period/cycle there will (almost) always be 3 leap years and
8 "non" leap years.  Odd years such as 1900 and 2100 are not leap years in
most of the world, but as we are not within those cases, let us go on with
those numbers.

So, if we take the remainders and multiply them out, we get 8 x .071429 for
a subtotal of .571432 and 3 x .142857 is .428571, so then in turn the totals
of those remainders are 1.000003, which is really close to 1.

As these are fractions of 14 days (2 weeks), after 11 years, we end up with
a remainder of 1 x 14 days, or our 27th Payroll!

Looking Forward, denco-ga - Google Answers Researcher
Comments  
Subject: Re: Payroll Creep
From: cynthia-ga on 12 Jun 2005 12:38 PDT
 
The way it was explained to me (by an accountant) is that if a company
pays on the 15th and the 30th, there is no creep. 12 months X 2
payrolls per month = 24 paychecks, less accounting, same money.  It's
the same as the 1st and the 16th, but accountants (and owners) like
the former.

You can feel the creep coming when you get those "3rd" paychecks in
one calendar month that happen when you get paid every 14 days...

~~Cynthia

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  


Google Home - Answers FAQ - Terms of Service - Privacy Policy