Most employees receive a monthly payment. Some employees receive a salary every four weeks. They therefore receive thirteen payments every year. This seems beneficial, but also brings with it practical problems. Those who receive a salary every four weeks must carefully coordinate their income and fixed costs. Most higher monthly fixed costs are deliberately written off at the end of the month. This is the time when most account holders still have sufficient money in their checking account. For example, employees who receive a salary every four weeks cannot make agreements with the bank to collect the mortgage payments at a certain time. The salary always arrives on a different date. Of course it comes down to the same thing, but it is a different way of organizing. Calculated over a year, the employee receives thirteen lower payments compared to an employee with the same salary, with payment per month.
Organizing the finances
Many employees can make ends meet every month, but they must organize their finances well to keep things transparent. Other employees receive much more monthly than they spend per month. These employees most likely want to place the remaining money in a savings account on which they receive interest. In both cases, employees with a payment every four weeks have to organize their finances differently because almost all high charges are collected monthly.
How to deal with fixed costs?
The amounts debited may differ per four-week payment period. In many cases, the monthly collections will correspond to the payment of the salary, but if this is not the case, a portion must be reserved for the fixed costs that would otherwise weigh heavily on the next salary.
Distribution of fixed costs
To avoid having to find out every month how the salary payment is compared to the fixed costs, it is better to organize it by keeping a separate checking account. You then calculate how high your monthly costs are converted into the costs per four weeks. For example, you pay 750 euros monthly for mortgage, 200 for gas and electricity, 300 for insurance and 200 for other fixed costs. These amounts are automatically collected monthly.
The total fixed monthly costs are therefore:
1,450. These costs amount to 17,400 per year. Converted to a period of four weeks, the costs are: 17,400: 13 = 1338.46 If you transfer this amount to a separate checking account for each salary payment, you know exactly how much money you can keep for each payment.
What is the difference in salary
The payment per four weeks is of course less than the payment per month. Based on a monthly amount of 2,500 per month, we can easily convert this amount to a payment every four weeks. First we calculate the salary per year, without taking into account holiday pay, 13th month and other allowances. 2,500 x 12 = 30,000. For comparison, a benefit every four weeks would be: 30,000: 13 = 2,307.69