I’m starting a new job tomorrow, that runs on the school schedule (a paraprofessional position in a special needs preschool) and I need to sign and turn in my contract by Tuesday.
I’ve never worked in a school-year program before, so I’ve never had to make a decision about pay periods before. Obviously, with 22 pay periods I’d be paid more a week, but not be paid during the summer(eight weeks, anyway. I’m about 95% certain I’ll be returning to my summer job, then, though.) What else should I know to decide which option to pick? Is there a difference in taxes besides the amount withheld per check?
You are taxed on an annual basis (I’m assuming you’re in the U.S.), so there is no difference in what the Feds and state get each year. There may be slight differences in how the school district computes the withholding each period on a 22 pay year, but you can modify that to a certain extent by the way you fill out your W-4. (You can identify yourself as single with no exemptions even if you are married with two kids, for example, to increase your withholding. You can also ask that additional funds be withheld. I think you might be allowed to claim married with dependents when you do not have any to reduce your withholding, provided you do not try claiming 99 dependents so that no tax is withheld. (If you claim too few dependents and get too large of a refund or if you claim too many dependents and must pay too much tax in April, the IRS assumes you were playing games and demands a penalty payment right on the 1040.)
I’m a graduate student on a stipend which is paid September through May, and i have to save enough over that time to see me through June, July, August. If your ability to save is as bad as mine, go for the 26 week schedule.
My mom’s a teacher, so she deals with this issue with her paychecks. If you can trust yourself to set aside the appropriate amount each paycheck to last you through the summer, then they work out exactly the same (actually, the 22 pay period option will net you a little extra interest, but that’s insignificant). If you don’t trust yourself to manage your money that well, then go with the 26.
Is money tight? I know a lot of teachers that opt for the 22 week pay period because they need each and every penny each month. I have also seen these teachers try to survive on literally no income for the summer when their summer job plans fall through. It isn’t pretty.
If there is any way you can, I would go for the 26 week. I have seen the 22 week option lead to a lot of struggle. And, if you do end up going back to your summer job, imagine how nice it would be to get extra money to use in any way that you choose.