How to Determine the Hourly Rate of Pay for a Salaried Employee
Salaried employees are generally paid a fixed wage regardless of the number of hours worked. However, you may want to know the hourly rate of your employee's salary to calculate benefits, vacation time or sick days. In addition, under the Fair Labor Standards Act, if your salaried employee is nonexempt and works over the standard number of hours in a work period, you must pay overtime to your worker. Overtime rates are based on your employee's hourly pay rate.
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Instructions
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Reference the employee's regular salary rate and pay frequency. Common pay frequencies include weekly, biweekly (every other week), bimonthly (twice per month) and monthly. Use the employee's gross pay rate before taxes and other deductions are subtracted.
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Calculate the number of hours worked in the pay period. Normal salary payments do not require this calculation, so you may need to use a standard average, such as a 40-hour week, or conduct a physical calculation. For example, if you are applying sick pay benefits to your employee's paycheck, deduct the number of sick hours used from the standard 40-hour workweek calculation.
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Divide the employee's salary rate by the number of hours in the pay period. The result is your employee's hourly rate of pay. For example, if your employee is paid $1,000 every week, and you use a 40-hour workweek calculation, divide $1,000 by 40. In this scenario, the employee's rate of pay is $25 per hour.
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