How to Calculate the Total Payroll of Exempt & Non-Exempt Employees
When you consider your company's payroll expenses, calculating the total cost of payroll provides a more accurate look at the cost of your labor force compared to simply the gross wages that you issue each pay cycle. Employer taxes, as well as employer contributions for insurance, disability and other benefits, are important costs related to the cost of your payroll.
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Instructions
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Determine the exempt employee payroll. Identify the annual rate for each employee. Divide by 52 for a weekly rate, if paying weekly; or divide by 12 for a monthly rate if it is a monthly pay cycle. Add each of the gross pay figures.
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2
Calculate the non-exempt payroll. Review the time sheet for each employee and total the hours for the pay period. Multiply the hours worked by the hourly rate for the employee. If your employee earns $12 per hour for a 38-hour week, the gross pay equals $456.
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3
Determine the employer's Medicare tax liability for the gross payroll figures. The employer Medicare contribution is 6.2 percent as of 2011. Check the IRS publications each year for percentage changes. For example, if your total wages paid for the period equals $13,000, the Medicare contribution at 6.2 percent equals $806. In this case, you are responsible for the employer contribution on the first $106,800 of earnings per employee as of 2011.
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Calculate the employer's Social Security liability. The employer liability equals 1.45 percent as of 2011's publication. There are no earnings limits on Social Security tax liabilities. If your total wages equal $13,000, your employer contribution for Social Security equals $188.50.
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Account for any health insurance employer contributions and other associated contributions such as life insurance, short-term disability and long-term disability.
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Add all of the above-calculated figures together to obtain your total payroll costs including wages, employer taxes and other contributions.
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