5

I used to get paid monthly at base salary of 48k. I have recently changed my job and getting paid fortnightly with a base salary of 50k

I did some calculation and found out that if I get paid monthly I would end taking home $2962.09. However, my take home pay is $1367.13. This does not add up I thought the for nightly should have been 1481$ 2962/2 = 1481?

I was paid 2864 monthly at 48k base salary, being paid 50k fortnight is less than 2864. im confused here.

The website that i used to calculate this is http://www.paye.net.nz/calculator.html

Here is the summary of my pay. Note, my kiwi saver is 4% and student loan is applied at 12%

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  • 1
    There are 12 months in a year but there are 26 fortnights. – Victor May 9 '14 at 13:10
  • Two things: 1) Fortnightly (bi-weekly in the US) paychecks make managing cash-flow somewhat more difficult, since most bills like rent and utilities are on a monthly schedule. 2) There will be 2 calendar months in which you will get 3 paychecks, rather than 2. If you can live on the typical 2 payments/month, you can use those 2 "bonus" payments for savings boosters (or vacation money :)). – Rick Goldstein May 9 '14 at 22:20
  • How many weeks are in a month? 4.3, this means there are 2.15 fortnights in a month, 4,166 / 2.15 ~ 1,930 – Jalapeno Jun 5 '18 at 14:23
15

A month is not four weeks, so your fortnightly pay is not half of your monthly pay. There are twelve months in a year but there are 52.18 weeks (allowing for leap years but not for the fact that 1900 and 2100 are not leap years). So your fortnightly pay should be (2 * 12/52.18) of your monthly pay, which would be $1362.44. In fact they've been slightly generous on the fortnightly pay calculation and assumed there are exactly 52 weeks in a year, so you're very slightly better off (around 0.3%) being paid fortnightly instead of monthly.

-2

Monthly is far superior to weekly or fortnightly pay. What a lot of people don't realise is that when you are paid monthly you end up with a lot more cash in your hand every month, often hundreds of dollars more each month.

Just compare a monthly amount and 4 x a weekly amount (which you are forced to live on for 10 months per year) and you will see there is a staggering difference between the two.

After being paid by the month I went onto fortnightly. All of a sudden I felt as if I were on a lower pay bracket. Of course, as long as you stay for the whole year you eventually get 2 months (with more weeks in them) where you get extra pay but how hard is it to budget that way and why live on a lower salary than you are actually earning for the rest of the year (10 months)? It doesn't make sense to me to wait for my money for 6 months.

It is far, far better to budget every month on exactly the same amount and you enjoy a higher standard of living for the entire year.

It takes a little adjustment to get used to it, but after a while budgeting becomes much simpler when you only do it once per month, plus you have a lot more cash in hand and more control of your money every month.

  • I am not the downvoter but it seems your answer, while reasonable and interesting, does not really address the question. – Relaxed Dec 1 '14 at 9:53
  • This is pretty subjective as well as not answering the question. – Andy Dec 1 '14 at 18:49

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