How to Use Formulas to Figure Payroll

Using a formula will help you quickly calculate your payroll.

To use formulas to calculate your payroll, you will need to create an algebraic expression that encompasses all the variables in relation to your payroll. After you create the formula, use a pen and paper to solve the equation or use a more advanced method by creating a spreadsheet in a program like Microsoft Excel. The main part is being able to write out the formula so you properly enter both wages paid, any taxes and other various payroll expenses.

Instructions

1. Determine each variable that you have to pay during each payroll cycle. For example, a company pays wages, matches 10 percent of wages for 401k, and pays a total of 15 percent of wages in taxes on the payroll.

2. Write out the formula using the variables, keeping in mind variables based on total wages. Start with the total wages calculation. For example, if a person makes $14 an hour, then write $14 * Hours = Total Wages. Then add one variable at a time. In the example, Total Wages * 10 percent = 401k Contributions, then Total Wages * 15 percent = Taxes Paid.

3. Bring the formula together. In the example, Total Wages + 401k Contributions + Taxes Paid = Total Pay Per Person.

4. Write the same formula for each person, changing any variables, such as pay scale or retirement matching percentages.

5. Add together each person's pay to find total payroll.

References

• The Math Page: Algebraic Expressions