Payroll Calculator

Overtime pay is typically calculated at 1.5 times the regular hourly rate for hours worked beyond 40 hours in a workweek (time and a half). Some states may have different overtime rules, and certain jobs may be exempt from overtime requirements.

For example, if an employee's regular rate is $20 per hour and they work 45 hours in a week, they would receive $20/hour for the first 40 hours ($800) plus $30/hour (1.5 × $20) for the 5 overtime hours ($150), for a total of $950.

Gross pay is the total amount earned before any deductions are taken out. This includes base wages, overtime, bonuses, and any other compensation.

Net pay (take-home pay) is what remains after all deductions are withheld from the gross pay. These deductions include taxes (federal, state, local), Social Security and Medicare contributions (FICA), health insurance premiums, retirement contributions, and other withholdings.

Net pay is the actual amount that an employee receives in their paycheck or direct deposit.

The primary taxes withheld from paychecks include:

• Federal Income Tax: Based on the employee's Form W-4 and tax brackets established by the IRS.
• FICA Taxes: Social Security (6.2% of wages up to annual limit) and Medicare (1.45% of all wages, with additional 0.9% for high earners).
• State Income Tax: Varies by state, with some states having no income tax.
• Local Taxes: Some cities or counties may impose additional income taxes.

Other deductions may include health insurance premiums, retirement contributions, flexible spending accounts, garnishments, or union dues.

Pay frequency is often determined by state laws, industry standards, and company policy. The most common pay periods are:

• Weekly: 52 pay periods per year
• Bi-Weekly: 26 pay periods per year (every two weeks)
• Semi-Monthly: 24 pay periods per year (typically the 15th and last day of the month)
• Monthly: 12 pay periods per year

Many states have requirements regarding minimum pay frequency. For example, some states require weekly or bi-weekly payments for certain types of workers, while others allow monthly payments. Employers should check their state's requirements.

Employers are responsible for paying certain taxes in addition to those withheld from employee paychecks:

• Matching FICA Contributions: Employers must match the 6.2% Social Security and 1.45% Medicare taxes that employees pay.
• Federal Unemployment Tax (FUTA): Paid entirely by employers, typically 6% on the first $7,000 of employee wages annually, with credits available for state unemployment taxes paid.
• State Unemployment Insurance (SUI): Rates vary by state and may be partly based on the employer's history of laid-off employees who have claimed unemployment benefits.

These employer taxes are not deducted from employee paychecks but represent an additional payroll cost for the business beyond the wages paid.