How to Calculate My Payroll Check Manually
Many employers use a computerized payroll system to calculate their payroll. Still, the manual works just fine for some companies, particularly if the payroll consists of ten or fewer employees. A manual payroll is done entirely by hand; therefore, because of its propensity for errors, it is not recommended if the payroll is large. To successfully calculate a payroll manually, you must be detail-oriented, and have solid mathematical skills and a good understanding of payroll procedures.
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Instructions
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Calculate regular hours. Typically, hourly employees must record their time worked on a timesheet or punch a time clock using a time card. Pay the hourly employee based on his time card data. For instance, say the employee’s time card reflects: in–8 a.m., lunch in–12:30 p.m., lunch out–1 p.m., out–4:30 p.m., Monday to Friday. Subtract 30 minutes for unpaid lunch. Pay him 8 regular hours for each day, which equals 40 regular hours for the week.
Pay regular hours at the employee’s regular pay rate. For example, say the payroll is biweekly; he has 40 regular hours for each week; and earns $10 per hour. Calculate as follows: 40 hours x 2 weeks = 80 regular hours x $10 per hour = $800 gross pay.
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Determine overtime. Overtime hours are hours worked in excess of 40 to be paid at 1 ½ times the employee’s normal pay rate. For instance, say the employee earns $9 per hour and her time card reflects: in–7:30 a.m., lunch in–11:30 a.m., lunch out–12:30 p.m., out–5:30 p.m., Monday to Friday. Subtract one hour for unpaid lunch. Calculate as follows: 9 hours x 5 days = 45 hours. Pay 40 hours at her regular pay rate. Calculate overtime as follows: 5 hours x $13.50 ($9 x 1.5) = $67.50--overtime pay. Pay overtime with the employee’s regular paycheck.
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Pay vacation, sick, personal, and holiday hours at the employee’s normal pay rate. If the employer chooses to pay his employees double-time for hours worked on weekends or holidays, pay them at twice the employee’s normal rate. For instance, say the employee worked 8 hours on Christmas Day and earns $11 per hour. Calculate as follows: 8 x $22 = $176--double-time pay.
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Pay salaried employees a set wage each pay period. Most employers do not require salaried workers to use a time clock. Furthermore, most salaried workers are exempt from overtime pay. You might need to prorate a salaried employee’s pay if she is a new hire, if she terminated or if she was overpaid. Use the following example to prorate her pay based on a weekly payroll: 60,000 (annual salary) / 52 weeks / 5 days = $230.77--daily rate.
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Tips & Warnings
Use the employee’s Form W-4 and the IRS’ Circular E for the appropriate year to determine the federal income tax withholding.
If applicable, use the employee’s state tax form and the state tax withholding tables to determine the state income tax withholding.
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