JQuery allow only two numbers after decimal point

The logic is every time a user entering a number you have to check two things.

1. Has the user entered decimal point?
2. Are the decimal places more than two?

For the first one you can use $(this).val().indexOf('.') != -1

For the second one you can use $(this).val().substring($(this).val().indexOf('.'), $(this).val().indexOf('.').length).length > 2

EDIT-1
Also, you have to add event.which != 0 && event.which != 8 so that arrow keys and backspace work in Firefox (Manoj comment)

EDIT-2
Also, you have to add $(this)[0].selectionStart >= text.length - 2 so that you can add digits if the cursor is to the left of the decimal point (BIdesi comment)

EDIT-3
Also, you have to check if user deleted . and placed it somewhere else creating a value with more than 2 digits after the decimal. So you have to add $this.val($this.val().substring(0, $this.val().indexOf('.') + 3)); for cutting extra digits (Gilberto Sánchez comment)

EDIT-4
To handle pasted data, you must bind a paste event handler.Then you have to check if pasted data have . withtext.indexOf('.') > -1 and more than 2 digits after the decimal with text.substring(text.indexOf('.')).length > 3. If so, you have to cut extra digits. Also you have to check that user entered numeric input with $.isNumeric() (darasd comment).

Here is the code:

$('.number').keypress(function(event) {
    var $this = $(this);
    if ((event.which != 46 || $this.val().indexOf('.') != -1) &&
       ((event.which < 48 || event.which > 57) &&
       (event.which != 0 && event.which != 8))) {
           event.preventDefault();
    }

    var text = $(this).val();
    if ((event.which == 46) && (text.indexOf('.') == -1)) {
        setTimeout(function() {
            if ($this.val().substring($this.val().indexOf('.')).length > 3) {
                $this.val($this.val().substring(0, $this.val().indexOf('.') + 3));
            }
        }, 1);
    }

    if ((text.indexOf('.') != -1) &&
        (text.substring(text.indexOf('.')).length > 2) &&
        (event.which != 0 && event.which != 8) &&
        ($(this)[0].selectionStart >= text.length - 2)) {
            event.preventDefault();
    }      
});

$('.number').bind("paste", function(e) {
var text = e.originalEvent.clipboardData.getData('Text');
if ($.isNumeric(text)) {
    if ((text.substring(text.indexOf('.')).length > 3) && (text.indexOf('.') > -1)) {
        e.preventDefault();
        $(this).val(text.substring(0, text.indexOf('.') + 3));
   }
}
else {
        e.preventDefault();
     }
});

.number {
  padding: 5px 10px;
  font-size: 16px;
}

<script src="https://ajax.googleapis.com/ajax/libs/jquery/2.1.1/jquery.min.js"></script>
<input type="text" class="number" />

It can also be done with a regular expression:

    $('.class').on('input', function () {
        this.value = this.value.match(/^\d+\.?\d{0,2}/);
    });

Name the css selector .class to whatever you like and put it on the input.