thread 3 paycheck months (biweekly payroll) and benefits deductions in Staff & Payroll

3 paycheck months (biweekly payroll) and benefits deductions

UDRGHR — Sun, 21 Sep 2025 06:14:42 GMT

Our payroll is biweekly so there are usually two months out of the year with a 3rd paycheck, so 26 paychecks/year. My question is about benefits deductions which I set up to be deducted monthly. In a normal month with two paychecks, Square deducts half of the monthly benefits amount from each check, correct? What does it do in months with three paychecks? How do I best address this so that my employees are not deducted more than they owe?

Re: 3 paycheck months (biweekly payroll) and benefits deductions

DinaLRosenberg — Sun, 08 Sep 2024 13:53:32 GMT

Thats' a really good question. I run weekly payroll- when you run bi-monthly I thought it was like the 1st and 15th so it never forces a 3rd payroll in a month?

Re: 3 paycheck months (biweekly payroll) and benefits deductions

DinaLRosenberg — Sun, 08 Sep 2024 13:59:17 GMT

So- I just checked out this article https://squareup.com/us/en/the-bottom-line/operating-your-business/pay-schedules

I'm not sure if this is how it works or if it is a "work around" but what I would do is calculate how many payroll periods there would be in a year in a bi-weekly schedule (I believe 26). Then I would take the annual cost of the benefit and divide it by the number of pay periods for the proper check deduction.

So, for example:

$5,000 annual cost of benefit divided by 26 pay periods a year (on bi-weekly that's the #) would be a check deduction of $192.31 for each employee.

Re: 3 paycheck months (biweekly payroll) and benefits deductions

Candlestore — Sun, 08 Sep 2024 14:08:34 GMT

@UDRGHR ;

I could be wrong here but when I worked a W2 job my benefits for a year were say 1200 a year. The Deduction was based on 26 Pay periods a year which is half of 52 weeks in a year. This way when my salary was say 60,000 a year, my Monthly pay check was only over $5000 a month 2 times a year, the other 10 were under $5000 a month. 60,000 / 26 = $2307.70 about per check. So the 10 months I was actually only paid about $4615 a month and the 2 months I was paid about $6922. So I am guessing benefits are divided by 26 paychecks too.

Re: 3 paycheck months (biweekly payroll) and benefits deductions

DinaLRosenberg — Sun, 08 Sep 2024 14:10:13 GMT

I think that's the way to go- you gotta do it annually based on 26 weeks.. not divided in half per month..

all deductions are based on # of pay periods