How many fortnights are in a calendar year?
There are 26 whole fortnights in a year, with either 1 day remainder for non-leap years or 2 days remainder for leap years where there is that additional day in February.
To find the number of fortnights in a year, simply divide the total number of days in a year, being 365.25, by the number of days in a fortnight, being 14, like so:
\frac{365.25}{14} \approx 26.09
While this may help with handling math problems, there is one important reason why you will need to monitor this every financial year.
Are You Paid A Fortnightly Salary?
As the number of fortnights does not neatly fit into a standard year, it does present a little problem with tax once every 6 to 7 years or so.
Depending on your employer’s payroll cycle work weeks, if you are paid every fortnight and your first pay of the new financial year happens on the 1st of July, then you will end up receiving 27 pays in that financial year.
Why This May Cause A Tax Issue For You
So what if I receive an additional pay in the financial year? How bad can more money that financial year be? How’s that a problem?
The problem with those financial years with 27 pay fortnights is that when you come to the end of the year, you will find that your employer has only been remitting tax based on a 26-fortnights-per-year basis.
This means you may have to pay a little more tax than what has been withheld.
Here’s an example demonstrating the problem:
Suppose you earn an annual salary of $80,600 and your employer simply divides this salary by 26 to calculate your gross pay per fortnight, being $3,100.
The current tax withheld for a resident claiming the tax-free threshold is $704. Therefore, the employees’ income tax return will have at a minimum the $80,600 annual salary and $704 x 26 = $18,304 tax withheld.
However, for the financial year where the employee receives 27 pays the employee will have as income $3,100 x 27 = $83,700 and tax withheld of $704 x 26 = $19,008.
Is the tax withheld adequate?
On taxable earnings of $83,700 the amount of tax that should be withheld is calculated as:
5\,092 + ((83\,700 - 45\,000) \times 32.5\%) = 17\,670
Oh, and don’t forget the Medicare Levy of 2%:
83\,700 \times 2\% = 1\,674
Therefore, the total amount of tax payable is:
17\,670 + 1\,674 = 19\,344
You are short $336 from the amount the employer has withheld for you during the year.
This is why it pays to know how many fortnights there in a year so that should you be paid on the 1st or 2nd of July you would be wise in finding out if that means you’ll be receiving a total of 27 pays in the financial year.
This is why the ATO advise for those years of 27 fortnightly pays to instruct your employer’s payroll department to withhold additional withholding .
It pays to monitor when you are paid in the first week of the financial year. Remember, it’s when the money lands in your account from your employer’s payroll, not the period of time displayed on the payslip for what you were paid.
How Many Fortnights In A Year?
There are 26 full fortnights a year, but if you are paid fortnightly from your employer you may want to request from your employer’s payroll department if they can withhold additional tax for those 27 fortnight financial years.
