1. PAYROLL

2. Calculating Various Types of Employees’ Gross Pay
Define, compare, and contrast weekly, biweekly, semimonthly, and monthly pay period.
Calculate gross pay with overtime on the basis of time.

3. 26 TIMES(EVERY TWO WEEKS)
PAYROLL CYCLES
WEEKLY
52 TIMES(ONCE A WEEK)
40,000÷52($769.23)
BIWEEKLY
26 TIMES(EVERY TWO WEEKS)
40,000÷26($ )
SEMIMONTHLY
24 TIMES (TWICE A MONTH)
40,000÷24($ )
MONTHLY
12 TIMES (ONCE A MONTH)
40,000÷12($ )

4. Calculate Period Salary Earnings
Annual salary of $55,000. Payroll is semimonthly.
55000 ÷ 24 =
Monthly salary of $4,000. Payroll is bi-weekly.
4000 x 12÷26 =
Monthly salary of $ Payroll is weekly.
3600 x 12 ÷ 52 =

5. Hourly Rate of Pay; Calculation of Overtime
Gross pay = Hours Employee worked x Rate per hour
Hourly overtime pay rate = Regular hourly pay rate x 1.5
Gross pay = Earnings for 40 hours + Earnings at time-and-a-half rate

6. Calculate Total Earnings--Hourly
Jessica earns $10.50 per hour. During this weekly pay period she worked 46 hours. What is her gross pay?
10.50 x 40 = 420
10.50 x 1.5 x 6 = 94.50
TOTAL =
Jason earns $13.25 per hour. During this bi-weekly pay period he worked 90 hours. What is his gross pay?
13.25 x 80 = 1060
13.25 x 1.5 x 10 =
TOTAL =

7. Commission is a certain percentage of the amount a salesperson sells.
Straight Commission
Commission is a certain percentage of the amount a salesperson sells.
Larry is paid a straight commission of 8%. His computer net sales were $100, What is his gross pay?
$100,000 x .08 = $8,000 or
$100,000 x 8%= $8,000
Commission amount = (Sales x rate) - Draw

8. Salary Plus Commission
Gross Pay = Salary + Commission
Chung receives a salary of $2,500 per month. He also receives a 5% commission for sales over $15, Last month’s sales were $75,000. Calculate Chung’s gross pay.
$2,500 + ($60,000 x .05) = $5,500

9. TYPICAL PAYROLL DEDUCTIONS
FEDERAL
F.I.C.A.--Social Security & Medicare
referred to as OASDI
Old-Age, Survivors, Disability Insurance + Medical Insurance (HI)
Social Security tax rate = 6.2% on employee + employer
SS wage base is $80,400 (2004 actual 87,900)
Medicare tax rate = 1.45 % on all earnings
Federal Income tax
based on amount earned and withholding allowances
State Income Tax
Other voluntary deductions