Author Topic: Overheard at Work  (Read 5897940 times)

johnny847

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Re: Overheard at Work
« Reply #7300 on: March 09, 2015, 11:10:57 AM »
Once we moved from 24 paychecks (semi-monthly) to 26 paychecks (bi-weekly) and a coworker said, "I like it. You get more checks." So? "So it's like you get paid more!" But you don't... bc your annual salary is still the same. "You get more checks and more often, so it just feels like you get paid more!" I swear she probably spent more too because of her perceived "fake raise". What a dumbass.

While the dollar amount per year may not change you are getting more money the more frequent the pay periods due to the time value of money. Ideally you would get paid per second (or whatever the smallest practical interval may be - daily perhaps) because then you can invest the money on your behalf as your are earning it instead of the employer using the money they owe you and investing it on their behalf (which they definitely do).

That said... yes your coworker is a dumbass if they are spending more money or think that they get a "bonus month" for the two months where they get 3 pay periods.

While technically true, this effect should be negligible. If you can prove me wrong, using a "typical" salary, then I'm all ears.

Also, more importantly, this benefit is only realized if you actually invest the money somehow. Considering how financially dumb these coworkers are, I'd be surprised if they actually invest it. Meaning they aren't realizing the time value of money. I suppose Mrs. Cool Cat is realizing it.

Oh and finally, because you want to bring up the what should be negligible effect of the time value of money for a biweekly vs semimonthly pay period, the 26 biweekly pay schedule works against you for taxes. Suppose you're $5000 above the 15% tax bracket on a 24 paycheck cycle, and you always get inflationary adjustments to your salary. You will always be $5000 above the 15% bracket. But suppose now you switch to a 26 paycheck cycle. Because 365 days is not divisible by 14 days/biweekly period, there will be a year with a 27 paycheck cycle every so often (let's just say it's every 5 years). Also suppose every paycheck is $3000 (whether this actually gets you into the 25% bracket is not the point of the exercise). So over a 5 year period, you will have paid a bit more in tax on the 26 paycheck cycle vs the 24 paycheck cycle because every 5th year you will be taxed at 25% on the last $3500 of your pay instead of the last $500, even though you are getting paid at the same rate per hour every year.

Aw man. I'm in a 27-paycheck year and you just bummed me out.

Oops. My bad =P.

It's even worse for me because I'm on the border of the 15% and 25% brackets. I believe I'm on a 27 paycheck year this year (my employer's fiscal year ends 06/30, so they'll release the paycheck calendar once it ends) so that means I will have some of my pay end up in the 25% bracket, whereas if I were on a semimonthly schedule like some of my coworkers, then I wouldn't be in the 25% bracket at all.

Shade00

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Re: Overheard at Work
« Reply #7301 on: March 09, 2015, 11:14:11 AM »
We had a work 'party' (term used loosely) last Friday. While we were sitting around, I let slip that I was happy with our 401(k)'s recent addition of several Vanguard funds because it would help me retire earlier. This prompted a discussion, including some disbelief at my plans, but the forehead-slapping moment came when a coworker told me her financial adviser told her she needed $4 million to retire. I can only imagine that her idea of retirement means having a live-in maid and a chauffeur.

iowajes

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Re: Overheard at Work
« Reply #7302 on: March 09, 2015, 11:20:53 AM »
All this paycheck talk made me realize I don't even know how often we get paid. 

I know it isn't monthly anymore. My last job we got paid on the 1st.  But I don't know if it is twice a month or biweekly here.

As long as money shows up on a fairly regular interval, it doesn't matter to me when I get it.

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Re: Overheard at Work
« Reply #7303 on: March 09, 2015, 11:21:13 AM »
Our company just finished our transfer from super expensive Mass Mutual to Vanguard for our 401k.  They made us each log in today and do the "set your goals" part (pretty much just a force to make sure people know what the website was).  When Vanguard asked for retirement age to calculate your chance of success, it didn't accept any number I put in, with a nice message of "please enter any round number between 62 and 100".  I asked our CFO (in charge of the transfer) if it was a glitch or not, and he responds with "No, no one can retire before 62, why would a lower number be available?"  The man makes 180-200k a year...

sol

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Re: Overheard at Work
« Reply #7304 on: March 09, 2015, 11:25:21 AM »
Aw man. I'm in a 27-paycheck year and you just bummed me out.

Don't be bummed out.  The extra taxes on the 27 paycheck year are always and exactly canceled out by the reduced taxes in the 26 paycheck years, as compared to the person who is paid bimonthly.

If you're really worried about it, you could always ask for two weeks of leave without pay, would that be better?  What's that, you say you don't want to make less money?  Then you've just convinced yourself that the extra pay period is a good thing, haven't you.

Pooperman

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Re: Overheard at Work
« Reply #7305 on: March 09, 2015, 11:28:49 AM »
Our company just finished our transfer from super expensive Mass Mutual to Vanguard for our 401k.  They made us each log in today and do the "set your goals" part (pretty much just a force to make sure people know what the website was).  When Vanguard asked for retirement age to calculate your chance of success, it didn't accept any number I put in, with a nice message of "please enter any round number between 62 and 100".  I asked our CFO (in charge of the transfer) if it was a glitch or not, and he responds with "No, no one can retire before 62, why would a lower number be available?"  The man makes 180-200k a year...

Our plan (through Transamerica) is more expensive than vanguard, but now I know where those funds are going! We've got the option to set any age, set any income, and put either % or $ amounts towards it.

johnny847

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Re: Overheard at Work
« Reply #7306 on: March 09, 2015, 11:33:07 AM »
Aw man. I'm in a 27-paycheck year and you just bummed me out.

Don't be bummed out.  The extra taxes on the 27 paycheck year are always and exactly canceled out by the reduced taxes in the 26 paycheck years, as compared to the person who is paid bimonthly.

If you're really worried about it, you could always ask for two weeks of leave without pay, would that be better?  What's that, you say you don't want to make less money?  Then you've just convinced yourself that the extra pay period is a good thing, haven't you.

But it's not cancelled out. If you were on a semimonthly period, you would never have a year where you're subjecting more of your pay to your marginal tax bracket.

sol

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Re: Overheard at Work
« Reply #7307 on: March 09, 2015, 11:48:45 AM »
If you were on a semimonthly period, you would never have a year where you're subjecting more of your pay to your marginal tax bracket.

Right, if you're paid semimonthly then your taxes are the same every year.  If you're paid biweekly instead, then in most years you pay less tax because you make less money, and then every couple of years you get 27 pay periods and you pay more tax.

You seem to think that people who are paid biweekly have the same size paycheck as people who who are paid semimonthly.  'Tis not the case, sadly.

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Re: Overheard at Work
« Reply #7308 on: March 09, 2015, 11:52:46 AM »
Re: 26 pay periods vs. 24 pay periods, bi-weekly payments can be good psychologically if you plan your life around 2 paychecks per month. For example, I plan my life around about $4200 per month (this doesn't include retirement savings with my job which are taken out automatically). All my monthly expenditures are based around this figure, including contributions to my IRA and taxable investments. Two months out of the year I get an extra $2100 take home. Since my entire month was already planned out using the original $4200 figure, the additional $2100 seems like "extra" money, even if it's really not. I don't need it for any particular purpose, so it all gets thrown into investments. That's a nice feeling.

johnny847

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Re: Overheard at Work
« Reply #7309 on: March 09, 2015, 11:53:34 AM »
If you were on a semimonthly period, you would never have a year where you're subjecting more of your pay to your marginal tax bracket.

Right, if you're paid semimonthly then your taxes are the same every year.  If you're paid biweekly instead, then in most years you pay less tax because you make less money, and then every couple of years you get 27 pay periods and you pay more tax.

You seem to think that people who are paid biweekly have the same size paycheck as people who who are paid semimonthly.  'Tis not the case, sadly.

Let's take a real example: http://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/computing-hourly-rates-of-pay-using-the-2087-hour-divisor/

Quote
In 2011, the annual rate of basic pay of a GS-13, step 1, employee in the Washington, DC, locality pay area is $89,033. The employee's payroll calendar has 26 pay dates.

The employee's hourly rate of basic pay is $42.66 ($89,033/2,087 hours).

The employee's biweekly rate of basic pay is $3,412.80 ($42.66 x 80 hours).

The pay the employee will actually receive is $88,733 ($3,412.80 x 26 pay dates).

If calendar year 2011 had 27 pay dates (see 26 or 27 Pay Dates below), a GS-13, step 1, employee in the DC locality pay area would actually receive $92,146 ($3,412.80 x 27 pay dates).

If the employee was on a semimonthly schedule, then he/she would earn exactly $89033. So on a 26 paycheck year, the employee gets paid $300 less than if he/she were on a semimonthly period.
On a 27 paycheck year, the employee gets paid $3113 more than if he/she were on a semimonthly pay period.

According to http://www.reuters.com/article/2015/01/08/us-jobs-payroll-27thpaycheck-idUSKBN0KH1XI20150108, the 27 paycheck year occurs once every 11 years. So there's ten years of getting paid $300 less, and one year of getting paid $3113 more. So that's a difference of an extra $113 that is subjected to your marginal tax rate.

Obviously this effect is minor. But I wrote that up because dividendman wanted to bring up the negligible increase of the time value of money of getting paid biweekly vs semimonthly.


Finally, if the extra pay of a 27 paycheck cycle causes you to jump a tax bracket for that year, paying lower taxes on 26 paycheck years does not cancel out paying higher taxes on a 27 paycheck year.
« Last Edit: March 09, 2015, 11:55:14 AM by johnny847 »

sol

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Re: Overheard at Work
« Reply #7310 on: March 09, 2015, 12:24:08 PM »
Obviously this effect is minor.

I'm still not sure why your math works out to getting shorted $133 every 11 years.  If that were the case, they could have just added the $0.46 to all 287 pay periods over an 11 year cycle to get it to work out evenly.  Why would they deliberately underpay 4 million federal employee forty six cents less than their own stated wage scale?  Such an easy problem to fix, on one end or the other, that I'm having a hard time believing you've uncovered a fatal flaw in the system.

johnny847

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Re: Overheard at Work
« Reply #7311 on: March 09, 2015, 12:28:29 PM »
Obviously this effect is minor.

I'm still not sure why your math works out to getting shorted $133 every 11 years.  If that were the case, they could have just added the $0.46 to all 287 pay periods over an 11 year cycle to get it to work out evenly.  Why would they deliberately underpay 4 million federal employee forty six cents less than their own stated wage scale?  Such an easy problem to fix, on one end or the other, that I'm having a hard time believing you've uncovered a fatal flaw in the system.

Well then prove my math wrong. (And it's not being shorted $133, it's being shorted the taxes on $113 (you've got a typo) so the effect is less than that). And really, almost all that math is not done by me, it's done by the government.

But this part isn't really "fixable" so long as the 27 paycheck year is a possibility:
Finally, if the extra pay of a 27 paycheck cycle causes you to jump a tax bracket for that year, paying lower taxes on 26 paycheck years does not cancel out paying higher taxes on a 27 paycheck year.
« Last Edit: March 09, 2015, 12:35:05 PM by johnny847 »

lizzie

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Re: Overheard at Work
« Reply #7312 on: March 09, 2015, 12:29:02 PM »
Quote
According to http://www.reuters.com/article/2015/01/08/us-jobs-payroll-27thpaycheck-idUSKBN0KH1XI20150108, the 27 paycheck year occurs once every 11 years.

I'll take solace in the fact that I should be retired the next time this happens! ;-)

(BTW I'm really not broken up about it. Actually DH is on a biweekly schedule too and gets paid the opposite Friday from me. So every Friday in my house is a nuclear explosion of cash!)

johnny847

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Re: Overheard at Work
« Reply #7313 on: March 09, 2015, 12:33:05 PM »
Quote
According to http://www.reuters.com/article/2015/01/08/us-jobs-payroll-27thpaycheck-idUSKBN0KH1XI20150108, the 27 paycheck year occurs once every 11 years.

I'll take solace in the fact that I should be retired the next time this happens! ;-)

(BTW I'm really not broken up about it. Actually DH is on a biweekly schedule too and gets paid the opposite Friday from me. So every Friday in my house is a nuclear explosion of cash!)

Haha I figured you were joking ;)

You'd have a bigger explosion once a month if you were paid monthly =P

TheBuddha

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Re: Overheard at Work
« Reply #7314 on: March 09, 2015, 12:43:47 PM »
Clairvoyant shmairvoiyant - just use the online version of the I Ching. Absolutely free and works great, I use it all the time.

Thanks. I tried it. I got a result that might be applicable to many people on this forum:


Beneath the Soil, the Seedling pushes upward toward the light:
To preserve his integrity, the Superior Person contents himself with small gains that eventually lead to great accomplishment.

Supreme Success.
Have no doubts.
Seek guidance from someone you respect.
A constant move toward greater clarity will bring reward.

SITUATION ANALYSIS:

You are progressing, rising inch-by-inch toward certain success.
What makes this assured is your refusal to tilt headlong toward your goal, slamming into obstacles and going mad with frustration.
You have a clear map before you of the steps necessary to reach your objective.
With faithful patience and a careful conservation of personal energy and resources, you will run this long, slow distance.

Awesome :)

That answer looks familiar, I think I got the exact same answer when asking about my financial planning. The answers I get are always extremely relevant to the question I ask.
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dandarc

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Re: Overheard at Work
« Reply #7315 on: March 09, 2015, 12:46:32 PM »
I think y'all are quibbling over the rounding - i.e., it is not exactly an 11 year cycle.  Example - this year, January 1st fell on a Thursday.  So if it worked out exactly to 11 years, January 1st would fall on a Thursday every 11th year.  This does not happen - Jan. 1st 2048 is on a Wednesday.  In 1993, Jan. 1st was on a Friday.

May not be of any practical consequence to have a couple of day shift over a 55 year period, but it explains the discrepancy, in addition to the IRS example rounding off several hundredths of a cent in the hourly rate.
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johnny847

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Re: Overheard at Work
« Reply #7316 on: March 09, 2015, 12:59:10 PM »
I think y'all are quibbling over the rounding - i.e., it is not exactly an 11 year cycle.  Example - this year, January 1st fell on a Thursday.  So if it worked out exactly to 11 years, January 1st would fall on a Thursday every 11th year.  This does not happen - Jan. 1st 2048 is on a Wednesday.  In 1993, Jan. 1st was on a Friday.

May not be of any practical consequence to have a couple of day shift over a 55 year period, but it explains the discrepancy, in addition to the IRS example rounding off several hundredths of a cent in the hourly rate.

Maybe we are. But the point is that the cycle exists. Suppose it was a 12 year cycle. Then it would be advantageous from a tax standpoint to have a biweekly instead of a semimonthly pay cycle. Or if it was a 10 year cycle, then it would be advantageous for a semimonthly pay cycle instead of a biweekly cycle. Regardless, these two aren't going to be the same.

And the cycle is never going to be an exact period, because many companies move their paycheck date if the paycheck would fall on a bank holiday such as New Year's. I think if you figured this all out, then you would see after enough years that it would all line up eventually. But, the amount of time that it takes for it to line up would probably exceed the working lifetime of most people on this forum, and maybe even the average person.
And then also have fun with the fact that every 100 years is not a leap year, unless it's also divisible by 400.


At the risk of sounding like a broken record, rounding does not negate the effect of the extra taxes paid if you jump a tax bracket in a 27 paycheck year, like I believe I will this year.

sol

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Re: Overheard at Work
« Reply #7317 on: March 09, 2015, 01:04:56 PM »
I think y'all are quibbling over the rounding - i.e., it is not exactly an 11 year cycle.

Rounding errors were my first thought, as well.  This sample calculation shows it working out to a perfect 11 year cycle but also assumes exactly two leap years every 11 years, which obviously isn't right either.

Finally, if the extra pay of a 27 paycheck cycle causes you to jump a tax bracket for that year, paying lower taxes on 26 paycheck years does not cancel out paying higher taxes on a 27 paycheck year.

That's fair enough.  Tax brackets are always going to ding people who earn right near the cutoff values.  As I mentioned above, feel free to ask for two weeks of LWOP if you think it's really a problem, and then tell me if you're better off because of it.

Maybe we are. But the point is that the cycle exists. Suppose it was a 12 year cycle... Or if it was a 10 year cycle

Leap years happen every 4 years.  So it will be an 11 year cycle most of the time, and then it will be a 10 year cycle once to make up the difference. 

In either case, I'm hopeful that very few people here will work long enough to see it come around.  My take home lesson: your stated pay scale is very slightly bogus.  Which I already knew, looking at my tax returns vs my listed annual wage.



sol

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Re: Overheard at Work
« Reply #7318 on: March 09, 2015, 01:53:34 PM »
I think y'all are quibbling over the rounding - i.e., it is not exactly an 11 year cycle.

Rounding errors were my first thought, as well.  This sample calculation shows it working out to a perfect 11 year cycle but also assumes exactly two leap years every 11 years, which obviously isn't right either.

Finally, if the extra pay of a 27 paycheck cycle causes you to jump a tax bracket for that year, paying lower taxes on 26 paycheck years does not cancel out paying higher taxes on a 27 paycheck year.

That's fair enough.  Tax brackets are always going to ding people who earn right near the cutoff values.  As I mentioned above, feel free to ask for two weeks of LWOP if you think it's really a problem, and then tell me if you're better off because of it.

Maybe we are. But the point is that the cycle exists. Suppose it was a 12 year cycle... Or if it was a 10 year cycle

Leap years happen every 4 years.  So it will be an 11 year cycle most of the time, and then it will be a 10 year cycle once to make up the difference. 

In either case, I'm hopeful that very few people here will work long enough to see it come around.  My take home lesson: your stated pay scale is very slightly bogus.  Which I already knew, looking at my tax returns vs my listed annual wage.



Pooperman

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Re: Overheard at Work
« Reply #7319 on: March 09, 2015, 01:45:37 PM »
Guys, there are only 28 possible years. Of those, some number will be 26 paycheck years and some will be 27 paycheck years for bi-weekly. Semimonthly is clearly better because stability and predictability are more important.

iowajes

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Re: Overheard at Work
« Reply #7320 on: March 09, 2015, 01:58:06 PM »
Semimonthly is clearly better because stability and predictability are more important.

What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

They are all just arguing about a very minute tax implication.

Pooperman

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Re: Overheard at Work
« Reply #7321 on: March 09, 2015, 02:21:54 PM »
Semimonthly is clearly better because stability and predictability are more important.

What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

They are all just arguing about a very minute tax implication.

I was going for yearly stability.

iowajes

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Re: Overheard at Work
« Reply #7322 on: March 09, 2015, 03:26:36 PM »
What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

If by secure you mean salary.  A huge portion of the population is based on hourly wages, which can and do fluctuate based on how many hours they work, and also any job that pays bonuses or commissions based on sales or other performance factors also pays slightly more or less than the median each pay period.  I don't think it's the big deal people are making it out to be since so much of the current workforce is used to some fluctuation based on OT, bonuses, and sales commissions.  Typically the only people on a truly fixed monthly income are those who live on Social Security and/or pension and have no savings.

But regardless of whether they are paid every 2 weeks or bimonthly- the pay is going to be the same as the hours they worked in the weeks the paycheck is for. 

What might not be stable is those hours worked or the bonus they earn, but the occurrence of the pay date has no effect on that.
The factor that effects pay is amount worked, not frequency of paychecks.

ender

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Re: Overheard at Work
« Reply #7323 on: March 09, 2015, 03:36:40 PM »
Semimonthly is clearly better because stability and predictability are more important.

What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

They are all just arguing about a very minute tax implication.

I was going for yearly stability.


But what if I budget to the day? Then months like February and those blasted 31 day months screw me over ;)

arebelspy

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Re: Overheard at Work
« Reply #7324 on: March 09, 2015, 04:01:30 PM »
Semimonthly is clearly better because stability and predictability are more important.

What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

They are all just arguing about a very minute tax implication.

I was going for yearly stability.

Getting paid once/yr. on December 31 is also stable and predictable...  ;)
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johnny847

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Re: Overheard at Work
« Reply #7325 on: March 09, 2015, 04:10:18 PM »
In either case, I'm hopeful that very few people here will work long enough to see it come around. 
This is my conclusion too.

My take home lesson: your stated pay scale is very slightly bogus.  Which I already knew, looking at my tax returns vs my listed annual wage.

How is it very slightly bogus? And it's not even my pay scale. It's the federal government's.

Rural

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Re: Overheard at Work
« Reply #7326 on: March 09, 2015, 05:34:12 PM »
Semimonthly is clearly better because stability and predictability are more important.

What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

They are all just arguing about a very minute tax implication.

I was going for yearly stability.

Getting paid once/yr. on December 31 is also stable and predictable...  ;)


Actually, when I'm not doing admin work and getting a summer stipend, I get paid ten times a year (monthly, ten months). It's pretty stable.

sol

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Re: Overheard at Work
« Reply #7327 on: March 09, 2015, 05:47:31 PM »
How is it very slightly bogus? And it's not even my pay scale. It's the federal government's.

Ha!  Still stuck in conflict mode, I see.

I meant the generic "you" not you in particular.   You, me, anyone with a biweekly check.  Your pay scale (our pay scales, any pay scales) are very slightly bogus because the annual dollar amount they claim to be paying you is based on a very long cycle of 26 pay periods in some years and 27 in others, and so they slightly underpay that amount in some years and slightly overpay in other years and you'd need to work many decades to have it all average out correctly with the leap years.

Timmmy

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Re: Overheard at Work
« Reply #7328 on: March 09, 2015, 06:16:41 PM »
Semimonthly is clearly better because stability and predictability are more important.

What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

They are all just arguing about a very minute tax implication.

I was going for yearly stability.

Getting paid once/yr. on December 31 is also stable and predictable...  ;)

I'd actually be ok with this.  I already budget my finances out by the month with a starting balance in my checking account to cover the whole month.  I've been kicking around the idea of quarterly planning instead so I have to do it less often.  I'd just have to bump the float balance in my checking account to cover.  I would lose out on some interest but I'd be paying for free time by doing my planning less frequently.  The idea of stretching to yearly sounds like a forced look at the bigger picture. 

Malaysia41

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Re: Overheard at Work
« Reply #7329 on: March 09, 2015, 06:26:48 PM »
I'm laughing at how much time and effort y'all are putting into arguing over mouse-nuts.  But I can't blame you.  Throw a bunch of financially literate engineering types a math problem and they can't help themselves!

Lord, I can't believe the CFO's comment about no one being able to retire before 62.  Surely that was tongue-in-cheek, no?
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johnny847

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Re: Overheard at Work
« Reply #7330 on: March 09, 2015, 07:14:59 PM »
How is it very slightly bogus? And it's not even my pay scale. It's the federal government's.

Ha!  Still stuck in conflict mode, I see.

I meant the generic "you" not you in particular.   You, me, anyone with a biweekly check.  Your pay scale (our pay scales, any pay scales) are very slightly bogus because the annual dollar amount they claim to be paying you is based on a very long cycle of 26 pay periods in some years and 27 in others, and so they slightly underpay that amount in some years and slightly overpay in other years and you'd need to work many decades to have it all average out correctly with the leap years.

Ah gotcha.

I'm laughing at how much time and effort y'all are putting into arguing over mouse-nuts.  But I can't blame you.  Throw a bunch of financially literate engineering types a math problem and they can't help themselves!

Lord, I can't believe the CFO's comment about no one being able to retire before 62.  Surely that was tongue-in-cheek, no?

Haha I only brought it up because somebody, I've lost track of who now, claimed that a 26 paycheck cycle is better than a 24 paycheck cycle because you're getting paid more often and hence you can invest your money faster (time value of money). To which I countered that if you want to take into account this negligible increase, then you should also take into account the negligible increase in taxes over a 10-12 year cycle because of the occasional 27 paycheck year.

TheBuddha

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Re: Overheard at Work
« Reply #7331 on: March 09, 2015, 10:31:58 PM »
I'm laughing at how much time and effort y'all are putting into arguing over mouse-nuts.

+1

I've seen this same argument before on the forum, can't remember where. For all I know it could have been in this thread. It would be funny if this were a complete rehash of an argument a hundred pages back.
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Cheddar Stacker

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Re: Overheard at Work
« Reply #7332 on: March 09, 2015, 11:32:41 PM »
Semimonthly is clearly better because stability and predictability are more important.

What? Regardless of if it is every 2 weeks or twice a month, the paycheck is stable and predictable, assuming your job is secure.

They are all just arguing about a very minute tax implication.

I was going for yearly stability.

Getting paid once/yr. on December 31 is also stable and predictable...  ;)

Stable and predictable sure, but suboptimal. You gotta frontload that shit man. Once/year on January 1 is the only way to go. Anything else is nonsense.
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KodeBlue

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Re: Overheard at Work
« Reply #7333 on: March 10, 2015, 12:51:48 AM »
Weekly, biweekly pay checks... I don't think that even exists on our side of the Atlantic. At least I cannot think of anyone who isn't paid monthly for a regular job.... the US sure is a strange and wonderful land.


When I had my first little part time teen-aged job it was at a store (does anyone remember Woolco?) that paid us every Friday ....IN CASH! We'd get an envelope with our wages, including coins, in cash and tear off handwritten pay stub for tax returns. Only time I ever worked for a company that paid in cash. This was in 1975.
« Last Edit: March 10, 2015, 04:45:42 AM by KodeBlue »

LennStar

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Re: Overheard at Work
« Reply #7334 on: March 10, 2015, 05:04:15 AM »
I'm laughing at how much time and effort y'all are putting into arguing over mouse-nuts.  But I can't blame you.  Throw a bunch of financially literate engineering types a math problem and they can't help themselves!

Lord, I can't believe the CFO's comment about no one being able to retire before 62.  Surely that was tongue-in-cheek, no?
It certainly is a good problem for nerd sniping.

And I am quite sure it was already TWICE in this thread ^^

MishMash

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Re: Overheard at Work
« Reply #7335 on: March 10, 2015, 06:53:43 AM »
I'm laughing at how much time and effort y'all are putting into arguing over mouse-nuts.  But I can't blame you.  Throw a bunch of financially literate engineering types a math problem and they can't help themselves!

Lord, I can't believe the CFO's comment about no one being able to retire before 62.  Surely that was tongue-in-cheek, no?
It certainly is a good problem for nerd sniping.

And I am quite sure it was already TWICE in this thread ^^

I think you greatly underestimate the overgrown men children I work with, and the amount of scratch your head stupidity I see on a daily basis.  Just about every day something happens that makes me scratch my head and think I fell down the rabbit hole into an alternate reality.  You think it's people screwing with me, I can ASSURE you, beyond all realms of possibility that these people are THAT big of idiots most of the time, it's not a game, or being coy, they are just financial morons.

I didn't think people could be this stupid either, particularly people with financial backgrounds.  But we are talking about the same man who bought his wife a ridiculously expensive luxury car (complete with a 300 dollar bow) for Christmas and is now routinely complaining about being able to afford the payments, I assume part of this is because his house is about a 2.5 mill plus property in DC.   Oh, and our company has been so far in the red for 5 years that I'm surprised the doors are still open (he's only been here 2 of those years in all fairness). 

frugalnacho

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Re: Overheard at Work
« Reply #7336 on: March 10, 2015, 07:28:21 AM »
How is it very slightly bogus? And it's not even my pay scale. It's the federal government's.

Ha!  Still stuck in conflict mode, I see.

I meant the generic "you" not you in particular.   You, me, anyone with a biweekly check.  Your pay scale (our pay scales, any pay scales) are very slightly bogus because the annual dollar amount they claim to be paying you is based on a very long cycle of 26 pay periods in some years and 27 in others, and so they slightly underpay that amount in some years and slightly overpay in other years and you'd need to work many decades to have it all average out correctly with the leap years.

Are your salaries actually stated in annual terms?  The companies i've worked for have always defined in either hourly, or as salary but defined as biweekly.   So if you make $40k/yr your employment contract doesn't state $40k/yr, it would state $1,600 biweekly based on 80 hours.

EDIT: math error

arebelspy

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Re: Overheard at Work
« Reply #7337 on: March 10, 2015, 07:59:57 AM »
I'm 98% sure mine is in annual terms, but I also sign a one-year contract.
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rocksinmyhead

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Re: Overheard at Work
« Reply #7338 on: March 10, 2015, 08:02:14 AM »
How is it very slightly bogus? And it's not even my pay scale. It's the federal government's.

Ha!  Still stuck in conflict mode, I see.

I meant the generic "you" not you in particular.   You, me, anyone with a biweekly check.  Your pay scale (our pay scales, any pay scales) are very slightly bogus because the annual dollar amount they claim to be paying you is based on a very long cycle of 26 pay periods in some years and 27 in others, and so they slightly underpay that amount in some years and slightly overpay in other years and you'd need to work many decades to have it all average out correctly with the leap years.

Are your salaries actually stated in annual terms?  The companies i've worked for have always defined in either hourly, or as salary but defined as biweekly.   So if you make $40k/yr your employment contract doesn't state $40k/yr, it would state $1,600 biweekly based on 80 hours.

EDIT: math error

mine is stated annually. this is my first real adult job ever though so n=1

johnny847

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Re: Overheard at Work
« Reply #7339 on: March 10, 2015, 08:03:50 AM »
How is it very slightly bogus? And it's not even my pay scale. It's the federal government's.

Ha!  Still stuck in conflict mode, I see.

I meant the generic "you" not you in particular.   You, me, anyone with a biweekly check.  Your pay scale (our pay scales, any pay scales) are very slightly bogus because the annual dollar amount they claim to be paying you is based on a very long cycle of 26 pay periods in some years and 27 in others, and so they slightly underpay that amount in some years and slightly overpay in other years and you'd need to work many decades to have it all average out correctly with the leap years.

Are your salaries actually stated in annual terms?  The companies i've worked for have always defined in either hourly, or as salary but defined as biweekly.   So if you make $40k/yr your employment contract doesn't state $40k/yr, it would state $1,600 biweekly based on 80 hours.

EDIT: math error

The link I pulled the figure from cites salary in annual terms

Pooperman

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Re: Overheard at Work
« Reply #7340 on: March 10, 2015, 08:04:12 AM »
How is it very slightly bogus? And it's not even my pay scale. It's the federal government's.

Ha!  Still stuck in conflict mode, I see.

I meant the generic "you" not you in particular.   You, me, anyone with a biweekly check.  Your pay scale (our pay scales, any pay scales) are very slightly bogus because the annual dollar amount they claim to be paying you is based on a very long cycle of 26 pay periods in some years and 27 in others, and so they slightly underpay that amount in some years and slightly overpay in other years and you'd need to work many decades to have it all average out correctly with the leap years.

Are your salaries actually stated in annual terms?  The companies i've worked for have always defined in either hourly, or as salary but defined as biweekly.   So if you make $40k/yr your employment contract doesn't state $40k/yr, it would state $1,600 biweekly based on 80 hours.

EDIT: math error

mine is stated annually. this is my first real adult job ever though so n=1
n=2 (semi-monthly paycycle)

ShoulderThingThatGoesUp

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Re: Overheard at Work
« Reply #7341 on: March 10, 2015, 08:06:30 AM »
Mine is stated monthly, but we're paid biweekly. Makes no sense.

Rural

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Re: Overheard at Work
« Reply #7342 on: March 10, 2015, 08:34:14 AM »
Mine's by academic year, August- May.

sol

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Re: Overheard at Work
« Reply #7343 on: March 10, 2015, 08:55:03 AM »
The link I pulled the figure from cites salary in annual terms

I'm a federal employee, so the link johnny pulled from the OPM website is actually pretty close to my situation.  Federal salaries are usually listed annually and paid biweekly.

rocksinmyhead

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Re: Overheard at Work
« Reply #7344 on: March 10, 2015, 09:11:08 AM »
Mine is stated monthly, but we're paid biweekly. Makes no sense.

haha that is really unnecessarily confusing!

Avidconsumer

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Re: Overheard at Work
« Reply #7345 on: March 10, 2015, 09:19:12 AM »
The Earth revolves around the sun in 365.242199 days (365 days, 5 hours, 48 minutes, 46 seconds). Every 100 years, there is no leap year?(should be 128 years) Tax implications please? I need to know!

I have created this spreadsheet to workout your exact tax implications based on what century you were born in....
« Last Edit: March 10, 2015, 09:24:36 AM by Avidconsumer »

johnny847

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Re: Overheard at Work
« Reply #7346 on: March 10, 2015, 09:26:45 AM »
The Earth revolves around the sun in 365.242199 days (365 days, 5 hours, 48 minutes, 46 seconds). Every 100 years, there is no leap year?(should be 128 years) Tax implications please? I need to know!

I have created this spreadsheet to workout your exact tax implications based on what century you were born in....

Haha for fun you should look up leap seconds.

Avidconsumer

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Re: Overheard at Work
« Reply #7347 on: March 10, 2015, 09:50:10 AM »
In addition, I have taken into account that fact that an earth day is getting longer by 1.7 milliseconds per century.

rocketpj

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Re: Overheard at Work
« Reply #7348 on: March 10, 2015, 10:14:44 AM »
I am on a biweekly pay schedule, my wife is on a bimonthly. 

I personally prefer the biweekly because whatever happens over an 11 year cycle, I work roughly the same amount over a two week cycle.  We have our mortgage payments coming out biweekly, on the day I get paid - which means I put exactly zero thought into covering the mortgage (aside from all the other benefits of biweekly mortgage payments).  I get paid every second Thursday, all my savings transfers, mortgage payments, bills etc. get paid automatically on payday.  It is always a business day, and there are never any wacky delays.

The bimonthly pay schedule is necessarily more randomized.  Often the 15th or 30th/31st/28th are on a weekend or long weekend, which means the pay goes in a day or two earlier than expected.  Sometimes the cheque is smaller because of the way her weeks work out, sometimes it is much bigger (e.g. in February her cheques are necessarily a bit smaller).  Less predictable in terms of dates, amounts and regularity.

Ultimately for someone who is a mustachian it doesn`t matter too much - one should have enough set aside that a few hundred dollars or a couple day variation in pay schedule won`t cause a problem.  However, we tend to save fairly aggressively and the variations mean that I can`t quite automate it all - I need to tweak the savings/mortgage reductions and other amounts up or down every couple of weeks based on whatever happens. 

It is a minor inconvenience, and really the kind of problem most people would love to have (DW is paid very well).  It just keeps me more involved in our monthly finances than I'd like to be (automated megasavings=good).  I guess that would be more of a 'mustachian people problems issue', but for the rest of the planet, two or three day variations in payday and amounts can be problematic - it was for me back in my 20s for sure.


Bigote

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Re: Overheard at Work
« Reply #7349 on: March 10, 2015, 10:31:20 AM »
When I had my first little part time teen-aged job it was at a store (does anyone remember Woolco?) that paid us every Friday ....IN CASH! We'd get an envelope with our wages, including coins, in cash and tear off handwritten pay stub for tax returns. Only time I ever worked for a company that paid in cash. This was in 1975.

I remember them!   And I worked for Kinney Shoes as my first job, which was owned by the same parent company (F.W. Woolworth).   We also got paid in cash every week.   The store was small enough that I got to see how it worked - the manager had a ledger where he multiplied people's hours by their rate, added in commission as appropriate.    All with pencil.   Then he paid us out of the drawer on Friday.    Back then there were enough cash purchases for it not to be an issue.  This was 1984-5.