Calculating Hourly Wages
What is the formula to calculate an employee's HOURLY WAGE from their annual salary?
Divide the annual salary by the total number of hours worked in a year (usually 2000 hours for full-time).
What is considered OVERTIME in most industries?
Hours worked over 40 hours in a week.
What is the primary difference between salary and hourly pay?
Salary is a fixed regular payment (Same amount of money paid every paycheck), while hourly pay is based on the number of hours worked.
Name 1 deduction from a paycheck
Social Security
Medicare
Federal Income Tax
Health Insurance
State Income Tax
What is NET PAY?
The amount of money an employee takes home after taxes and deductions are subtracted from gross pay.
If an employee makes $30 per hour and works 40 hours a week, what is their WEEKLY wage?
30 X 40 = $1200 per week
If an employee's regular hourly wage is $20, what is their OVERTIME WAGE?
20 X 1.5 = $30 an hour
If a salaried employee earns $60,000 a year, what is their monthly salary?
60000/12 = $5000 per month
To figure out your total deductions from your paycheck you must...
Add up all of your deductions
If an employee earns $4,000 and has $1,000 in deductions, what is their NET PAY?
$4000-$1000=$3000
An employee worked 45 hours in a week, and their hourly wage is $25 . How much will they earn in that WEEK,NOT INCLUDING OVERTIME?
$25 X 45=$1125 per week
HOW MANY HOURS OF OVERTIME are worked if an employee works 50 hours in a week?
10 hours of overtime.
Why might an employee prefer hourly pay over a salary?
Hourly pay can lead to higher earnings if hours worked exceed the standard full-time hours due to overtime pay.
Deductions are typically what percent of your gross pay?
30%
How do you calculate NET PAY?
Subtract total deductions from gross pay.
A part-time worker earns $15 per hour and works 25 hours weekly. What is their ANNUAL income?
15 X 25 X 52 = $19500 annually
An employee worked 48 hours one week. Calculate their TOTAL PAY if their hourly wage is $22.
Regular pay for 40 hours = 22 X 40 = 880
Overtime pay for 8 hours = 22 X 1.5 X 8 = 264
Total = 880 + 264 = 1144
List one advantage of being a salaried employee.
Typically, salaried employees receive benefits such as health insurance and paid leave.
How do tax deductions affect net pay?
Make your net pay decrease from your overall gross pay.
If an employee's gross monthly pay is $3,500 and they want to estimate their NET MONTHLY PAY, how could they calculate it if they estimate that 30% of their paycheck will be taken for deductions and taxes?
$3500 X 0.3=$1050 deductions and taxes
$3500-$1050=$2450 net pay
Calculate the HOURLY WAGE of an employee who earns $52,000 annually, assuming they work 40 hours a week and 2000 hours in a year.
52000/2000 = $26 an hour earned
An employee earns $18 per hour and worked 10 hours of overtime last week. What is their TOTAL EARNINGS FOR THE WEEK?
Regular pay = 18 X 40 = 720
Overtime pay = 18 X 1.5 X10 = 270
Total = 720 + 270 = 990
A company offers an employee the choice between a $50,000 salary or $24 per hour. If the employee works 40 hours a week every week for the entire year, which option provides a higher annual income?
Salary option gives $50000 per year
Hourly option gives 24 X 40 X 52 = $49920 a year
Salary is better.
If you make $15 dollars an hour before taxes and deductions how much will you make approximately per hour after taxes and deductions if your net pay is only 70% of your gross pay?
$15 X 0.7=$10.50 an hour
If an employee's gross annual salary is $80000 and they want to estimate their MONTHLY NET PAY assuming their deductions and taxes are 30%, how could they calculate this?
$80000 X 0.3=$24,000 taxes and deductions
$80000-$24000=$56000 net annual salary
$56000/12=$4666.66 net monthly pay