Hourly Paycheck Calculator
Hourly Paycheck Calculator is used to finding the amount of wages that will be received in hand after deducting an adequate amount of taxes such as social security taxes, fed taxes etc.
Hourly Paycheck Calculator
Y + ( RH * P ) + ( OH * A ) – T
- Y is the Year till date income
- RH is the Regular hours worked by the worker
- P is the wages paid per hour for regular hours
- OH is the overtime hours worked by the worker
- A is the wages paid per hour for overtime hours
- T is the taxes which shall include social security taxes, medicare, fed taxes etc.
About Hourly Paycheck Calculator
The formula for calculating the Hourly Paycheck is as per below –
Wherein,
- Y is the Year to date income.
- RH is the Regular hours worked by the worker.
- P is the wages paid per hour for regular hours.
- OH is the overtime hours worked by the worker.
- A is the wages paid per hour for overtime hours.
- T is the taxes which shall include social security taxes, medicare, fed taxes etc.
At many places as per work locations, the wages are paid on an hourly basis and also for overtime hours if any worked upon, will be paid on an hourly basis but the hourly rate that shall be paid will be higher than the normal hourly rate. This calculator will determine the paycheck and in hand receipt of the wages. There would be different deductions that shall be made before encashment of the cheque, and those are social security tax, medicare if any, Fed tax, state and local tax etc. There could be further deductions such as insurance that is employee paid health insurance etc. All these deductions need to be accounted for and adjusted along with the total amount due, and the net amount that remains shall be paid out to be the worker. There are different pay period in different parts of the world, but here we shall focus on weekly pay. For the time being, we shall ignore filing status that is whether the return will be filed single or married or household head, etc. as the deductions will vary. Our focus will get drifted towards tax instead of hourly paycheck calculation.
How to Calculate Using Hourly Paycheck Calculator?
Below are the steps that need to be followed –
Step #1 – One needs to start with the income that has already been received, or in other words, one needs to account for a year till date income, as deductions apply on them as well.
Step #2 – Determine the normal working hours of the organization or for the worker is concerned for a week.
Step #3 – Figure out the hourly rate that shall be paid for those normal working hours
Step #4 – Now multiply the number of hours determine in step 2 by rate paid per hour to determine the total amount that is due by the employer for the given week in concern.
Step #5 – Similarly determine the overtime hours worked by the employee during the given week.
Step #6 – Now determine the overtime rate per hour, which should be more than the normal rate per hour.
Step #7 – Again, take the product of the total overtime hours worked by the overtime rate per hour, and that amount shall be the overtime wages to be received by the employee.
Step #8 – In this step, take a total of the year till date income determines in step 1, total normal wages determine in step 4, and total overtime wages determine in step 7.
Step #9 – Figure out the taxes and other deductions such as social security tax, fed tax, any local tax, medicare or any employee-paid insurance etc.
Step #10 – Deduct the total amount arrived in step 9 from the total wages arrived in step 8, and the net result will be the total paycheck to be received by the employee for that period.
Example
Mr. Y is a young youth who is living in the US and has been born and brought up there only. He is working in a company where the policy of the firm is to pay wages weekly. He has earned $5,780 till now. The normal working hours of the employee is 8 hours a day. Mr. Y, however, is eligible for 1-hour leave but the same shall be unpaid. Mr. Y, due to personal reasons, had to take leave that 1 hour daily. To recover the unpaid wages, Mr. Y has worked overtime, and total numbers of overtime he worked daily came to ½ hour. The company has the policy to pay $75 standard wages per hour and $100 per hour overtime wages.
The company shall deduct social security taxes of the total gross income at a rate of 10% and local and fed taxes at a rate of 5% of the gross income. The employee shall bear the insurance expensesInsurance ExpensesInsurance Expense, also called Insurance Premium, is the amount a Company pays to obtain an insurance contract for covering their risk from any unexpected catastrophe. You can calculate it as a fixed percentage of the sum insured & it is paid at a daily pre-specified period. read more, which is $350 for the year, and the same will be deducted all at once.
Considering all of the above information and figures, you are required to compute the year till date income that shall be received by Mr. Y in hand after considering necessary adjustments.
Solution
We are given the normal hourly rate, overtime wages rate per hour. However, we are not given the normal and overtime hours directly, and hence we would need to calculate that first.
We can now use below formula to calculate the income from hourly rate calculator.
We shall now determine T per below –
- = $5,780 + (49 x $75 ) + ( 3.50 x $100 ) – T
- = 9,805 – T
Taxes such as social security taxes will be 10% of the gross and fed taxes 5% of the gross and insurance we are given.
Therefore, net incomeNet IncomeNet Income formula is calculated by deducting direct and indirect expenses from the total revenue of a business.. It is the most important number for the Company, analysts, investors, and shareholders of the Company as it measures the profit earned by the Company over a period of time.read more will be 9,805 – 980.50 – 490.25 – $350, which shall be 7,984.25.
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