Questions 2
Answers 601


Why did you repeat your question? Your example at the end is not correct –it’s absurd.


The total should shows four or five places beyond the decimal and you'll have to round up or down. You will explain who keeps the difference, the owner or employee after you round it back to 2-places beyond the decimal.  This is similar to the price you pay for gas 1/10 of a cent below a break point.  You won't find the tenths of a cent on your paycheck, so where does it go?


The quick answer to your question “where does it go,” “who keeps the difference,” is simple: The fractional payments are distributed in other pay checks. No single person or entity “keeps” the fractional parts of the payments.  To clarify, the payments rounded down are used for payments that are rounded up.


Converting US dollars to Pesos

The exchange rate is $0.0529 per Peso. So it’s necessary to divide the dollars by the exchange rate to convert to Pesos.

For your example: (40) * ($19.55/hour) = $782.00

($782.00) / (0.0529) = 14782.608 Pesos


In finance (payables), the value of the third decimal is used to determine if the second decimal is rounded up or remains the same. If the third decimal is five (5) or higher, then the second decimal is incremented. If third decimal is four (4) or lower, then the second decimal remains as it is. Using this criterion, the pay check for this employee is 14782.61 Pesos; it’s rounded up to the next centavo.


Theoretically, half the time this third decimal will range from (5) to (9) and the half the time it will range from (0) to (4).  Thought this is true, when the third decimal is zero (0), there is no fractional value, so it does not generate any excess. The fraction that is collected for 4, 3, 2, and 1, pays for 9, 8, 7, and 6; but the zero (0) does not pay for the five (5).  This sounds trivial, but after a million paychecks, the company pays an extra 1000 Pesos –about $52.92.   


This confirms the old maxim: Watch your centavos closely, the pesos will take care of themselves.  Listillosmiley




Nov 16, 2019