Calculation of Gross Earnings Explanation

Why is there a discrepancy between my gross annual earnings and my annual base salary?

Normally, there are 26 pay periods during a calendar year. Due to the idiosyncrasies in the calendar and the state's payroll cycle, state employees occasionally receive 27 paychecks in a calendar year instead of 26. When this occurs, the employee's gross annual earnings will be higher than the annual salary.

Leap Year Impact on Paychecks

The biweekly gross pay for employees paid on an "annual salary basis" (full-time employees), in payroll, is calculated on either a 365-day or a 366-day calendar year if the year is a leap year. During the state's fiscal year (April 1 – March 31) in which a leap year falls (an extra day in February), employees will notice a reduction in their gross biweekly pay even though their salary does not change. For example, biweekly gross pay of an academic employee paid in this mode will be calculated as 14/366th of his or her annual salary during a leap year and as 14/365 of the base annual salary during a regular year.

How do you determine the biweekly factor for leap year and non-leap year?

Normally, there are 26 pay periods during a calendar year. Due to the idiosyncrasies in the calendar and the state's payroll cycle, State employees occasionally receive 27 paychecks in a calendar year instead of 26. When this occurs, the employee's gross annual earnings will be higher than the annual salary.

The multiplication factor that is used to determine a biweekly salary is calculated by dividing the number of days in a pay period by the number of days in the year (14/365 = .038356).

Time Period Annual Salary Multiply Factor Biweekly Salary
Dec. 31, 2009 – Jan. 13, 2010 $60,687 .038356 $2,327.71

The fiscal year of April 1, 2007 – March 31, 2008 contained an extra day and, therefore, used the leap year multiplication factor to determine the biweekly earnings.multiplication factor to determine the biweekly earnings.

Whenever there is a leap year, this factor changes to accommodate the extra day (14/366 = .038251).

Time Period Annual Salary Multiply Factor Biweekly Salary
Jan. 3, 2008 – Jan. 16, 2008 $60,687 .038251 $2,321.34

The fiscal year of April 1, 2007 – March 31, 2008 contained an extra day and, therefore, used the leap year. Whenever there is a leap year, this factor changes to accommodate the extra day (14/366 = .038251).

Note

The leap year factor change will take effect on the paycheck date April 21, 2011. The reason for this early change is that the month of February 2012 falls within the Office of the State Comptroller’s new fiscal year of 2011–12.