Module 2 – Calculating payroll

Payroll calculations can differ depending on the compensation structure and employee type. For hourly, non-exempt workers, gross pay is simply hours worked x hourly rate. Overtime rates may apply over 40 hours in a workweek. Salaried exempt employees receive a fixed payment regardless of hours worked.

Common payroll formulas include:

• Gross pay = Hourly rate x Regular hours + (Overtime rate x Overtime hours)
• Gross pay = Salary / Pay periods in the year
• Commission earnings = % rate x Total sales
• Bonuses are typically fixed amounts paid out periodically

Payroll software helps efficiently run payroll calculations, track time and attendance, manage pay rates and issue accurate paystubs. It ensures full compliance with filing payroll taxes as well.