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Payroll Adjustments

Billings Village is considering shifting its payroll period from twice a month to monthly. Total payroll for the year is $80 million. Billings can earn 6% on its invested money. How much would the village save from such a change? Should it shift its payroll period to monthly.

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Total payment when payment twice a month is 24 (2*12)

That means company pays on average 80,000,000/24 = $3,333,333 per pay cycle.

If company delays this ...

Solution Summary

The solution find our the saving if the payroll is change from twice a month to monthly.