Paycheck
Calculating payroll hours can be a painstaking task. It takes good mathematical skills and exceptional attention to detail to compute employees' hours accurately. Although it is important to properly compute employees' regular pay, it is also critical to correctly calculate their overtime pay.
Instructions
Wage Computations
1. Gather and assess the employees' time sheets. Most time sheets are designed to record employees' regular, overtime, vacation, personal and sick hours. Calculate the employees' regular pay, which includes their actual hours worked. For example, if an employee works 32 hours for the week and her pay rate is $10 per hour. Her regular gross (before taxes) pay is 32 x $10 = $320.
2. Calculate benefit days such as vacation, personal or sick pay. This information should be listed on the time sheet under the designated column. Benefit days are paid at the employee's regular rate of pay. For example, if the employee has 8 sick hours and 8 vacation hours, and his pay rate is $12 per hour, his gross vacation wages should reflect 8 vac x $12 = $96. His gross sick wage should reflect 8 sick x $12 = $96. Therefore, he would receive a total of $192 in vacation and sick pay.
3. Determine the employee's overtime hours and pay those hours at time and a half. The employee must actually work 40 regular hours to be eligible for overtime pay. For example, if the employee has 40 regular hours and 9 overtime hours, and her pay rate is $11 per hour, her gross overtime wages should reflect 9 x $16.50 ($11 x 1.5---time and a half) = $148.50 in overtime pay.
4. Calculate any double-time pay owed to the employee. An employer may opt to pay his employees double-time for hours worked on national holidays. Double-time pay is similar to overtime pay except that it is paid at twice the employee's regular rate instead of time and a half. For example, if the employee has 10 hours to be paid at double-time and her regular pay rate is $13 per hour, her gross double-time wages should reflect 10 x $26 = $260 in double-time pay.
5. Check to ensure that overtime pay is being paid at time and a half. Payroll software will compute the overtime hours once you have entered the data in the system. However, since overtime pay is not paid as frequently as regular pay, double-check the employees' overtime pay before printing the checks and closing the payroll.
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