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thesolution  
#1 Posted : Wednesday, February 15, 2012 9:01:15 PM(UTC)
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If I multiply my bi-weekly pay by 26, it is several hundred dollars less than what my annual salary should be. This has been consistent at every pay grade I have been at. What is the reason for this?
fedman53  
#2 Posted : Wednesday, February 15, 2012 9:19:52 PM(UTC)
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Your hourly rate is calculated based on 2087 hours per year, instead of 2080, so you end up lower than the GS pay scale.
Knight  
#3 Posted : Wednesday, February 15, 2012 9:30:09 PM(UTC)
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From what I have seen, the annual salary is a guide and not a concrete fact. Like Fedman53 said, they use the 2087 hours per year to figure out you hourly rate and then there is the fact that sometimes your 26th PD might be in the next calendar year so your W-2 shows a different amount. OT can of course increase this to being more then the published amount.
GoHuskers  
#4 Posted : Thursday, February 16, 2012 2:25:57 AM(UTC)
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The reason they use 2087 hours, as I understand it, is that every year is 52 weeks, plus one day (plus 2 days for leap years). The extra 7 hours is to account for the fact that there are actually slightly more than 260 workdays in the average work year.

And then every 11 years or so you get a year with 27 pay days, which in theory makes up for the prior shortages.
Fed1969  
#5 Posted : Thursday, February 16, 2012 3:39:25 AM(UTC)
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thesolution wrote:
If I multiply my bi-weekly pay by 26, it is several hundred dollars less than what my annual salary should be. This has been consistent at every pay grade I have been at. What is the reason for this?

This is the ways things have been for years.  your hourly wage is based on 2087 hours. 
The HalfBreed  
#6 Posted : Thursday, February 16, 2012 11:10:54 AM(UTC)
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Fed1969 wrote:
This is the ways things have been for years.  your hourly wage is based on 2087 hours. 


I believe that was changed during the Reagan years, when they were looking for ways to increase revenue...1983'ish or so.
RETIRED 12/19/2012 !!! Good Bye Tension !!! Hello Pension !!!
rabbitdog99  
#7 Posted : Thursday, February 16, 2012 12:38:32 PM(UTC)
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thesolution wrote:
If I multiply my bi-weekly pay by 26, it is several hundred dollars less than what my annual salary should be. This has been consistent at every pay grade I have been at. What is the reason for this?
 

The discrepancy is because there's more than 52 weeks in a year.  There are 365.25 days in a year.  That's 52.18 weeks; 26.09 bi-weekly periods. 52.18 weeks times 40 would give you the 2087 hours of work per year.


 


If you multiply your bi-weekly pay by 26.09, it should equal your annual salary.


 


It's simply mathematics.



dmaceld  
#8 Posted : Friday, February 24, 2012 11:20:39 AM(UTC)
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The HalfBreed wrote:
Fed1969 wrote:
This is the ways things have been for years.  your hourly wage is based on 2087 hours. 


I believe that was changed during the Reagan years, when they were looking for ways to increase revenue...1983'ish or so.

Correct. Remember David Stockman, RR's wiz kid staffer? He's the one we have to thank. What he figured out is the calendar repeats every 28 years. 28 yrs x 365.25 d/y = 10227 days. 10227/7 = 1461 weeks. 1461 x 40 = 58440 hrs. 58440/28 = 2087.1429 hours/year. He was kind and dropped the .1429 hours. LOL

gh1  
#9 Posted : Monday, March 12, 2012 2:10:25 AM(UTC)
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Basically, what happens is that you do collect your annual salary, but you don't collect it fully in 26 pay periods because that is not quite equivalent to the length of a year.  If you received a pay check each time you worked an hour in the calendar year, you would get about 2087 paychecks that would total to the salary listed in the GS tables (let's not get into leap years, though!).


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