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Deductions for Employees Paid Bi-Weekly

Employees paid bi-weekly (26 pay dates a year) usually have two pay dates a month, but will have three pay dates in some months. Zenefits calculates and pushes deductions for bi-weekly employees by one of two methods: 24 (equivalent to a semi-monthly schedule) or 26 pay dates. However, any custom deduction amounts entered manually into Zenefits Payroll will show up in all paychecks, regardless of the method used for automatic calculation of normal deductions. To switch to a different method, contact Zenefits Support.

Method 1: 24 Paychecks

In this method, Zenefits calculates deductions for bi-weekly employees as if they were semi-monthly (24 pay dates in a year) so that monthly deduction amounts correspond directly with the premiums paid monthly for coverage.

  • Normal deductions for these employees are split evenly between two paychecks in all the months.
  • In the months with a third pay date, Zenefits will calculate no ($0) normal deductions for the third paycheck. This is sometimes referred to as a "benefits deduction holiday".

If required, only special deductions such as catch-ups or 401( k ) contributions as a percentage of salary will be taken from their paycheck for the third pay date of the month.

  • 100% of benefits deductions in the third paycheck will be catch-ups.
  • 401( k ) contributions as a percentage of salary are deducted from all paychecks. These deductions will always show up in every paycheck.

Method 2: 26 Paychecks

In this method, Zenefits spreads deductions evenly over all 26 pay dates in a year. In the months with a third pay date, the deductions will be the same across all three paychecks. If any catch-ups are required, they will show up along with normal deductions.

Note: There is a limitation for this method. Zenefits system does not consider the remaining number of paychecks in the plan year or calendar year to accurately calculate the revised deduction amounts, whenever there is a change in the middle of the plan year, including deduction amounts for new hires. In such cases, the administrator may have to reconcile the deductions manually for those employees.

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