Gross Pay to Net Pay

To determine gross pay, we must always remember to consider the pay period before calculating (weekly, bi-weekly, semi-monthly, monthly). 

Multiply the rate of pay x the hours worked to calculate the base pay.  Overtime will be paid in an hourly position after 40 hours.  To determine overtime rate multiple the base rate x 1.5.  After determining overtime rate (don't round here) calculate this by the number of hours worked over 40 hours (now round).  Add this to the base pay to determine gross pay. 

There are some salaried jobs that will pay overtime (not required).  You will calculate the overtime pay and add to the salaried base pay.

There are four required deductions:

1. Federal income tax (use tax tables)
2. State income tax (use tax tables)
3. Social security (6.2% of gross pay)
4. Medicare (1.45% of gross pay)

The information necessary to correctly determine how much to withhold for Federal Income Tax and State Income Tax is:  Pay period, marital status, gross pay, and allowances.  This is shared with your employer by completing a W-4 (before you get paid).