Hourly Payroll Calculator

Hourly Payroll Calculator

Use this calculator to estimate your gross and net pay based on your hourly wage, hours worked, and common deductions. Understand how regular hours, overtime, bonuses, and various taxes impact your take-home pay.

Understanding Your Hourly Paycheck

An hourly payroll calculator helps you break down your earnings and deductions to see your true take-home pay. For many hourly employees, understanding how each component contributes to their final paycheck is crucial for financial planning.

Key Components of Hourly Pay:

• Hourly Rate: This is the base amount you earn for each hour worked.
• Regular Hours: The standard hours worked within a pay period, typically up to 40 hours per week.
• Overtime Hours: Hours worked beyond the standard regular hours. In the U.S., overtime is usually paid at 1.5 times your regular hourly rate (time and a half).
• Bonus/Commission: Additional earnings that are not tied directly to hours worked, such as performance bonuses or sales commissions.

Common Payroll Deductions:

After calculating your gross pay (total earnings before deductions), various amounts are withheld from your paycheck. These can be categorized as pre-tax or post-tax, though for simplicity, our calculator focuses on the impact of common deductions.

• Pre-Tax Deductions: These are deductions taken from your gross pay before taxes are calculated. Common examples include contributions to a 401(k) retirement plan, health insurance premiums, or flexible spending accounts (FSAs). These deductions reduce your taxable income.
• Federal Income Tax Withholding: The amount withheld from your paycheck to cover your federal income tax liability. This is based on your W-4 form, which you fill out when you start a job.
• State Income Tax Withholding: Similar to federal tax, but for state income taxes. Not all states have state income tax.
• FICA Taxes (Social Security & Medicare): These are mandatory federal taxes that fund Social Security and Medicare programs.
  • Social Security: Currently 6.2% of your gross pay, up to an annual earnings limit.
  • Medicare: Currently 1.45% of all your gross pay, with no earnings limit.

How the Calculator Works:

Our calculator takes your hourly rate, regular hours, and overtime hours to determine your base earnings. It then adds any bonuses or commissions. From this gross pay, it subtracts pre-tax deductions to arrive at your taxable gross pay. Finally, it calculates and subtracts FICA taxes, federal income tax, and state income tax to give you your estimated net pay.

Example Calculation:

Let's say an employee earns $25.00 per hour, works 40 regular hours and 5 overtime hours, receives a $100 bonus, and has $100 in pre-tax deductions. Their federal tax withholding is 15%, and state tax withholding is 5%.

• Hourly Rate: $25.00
• Regular Hours: 40
• Overtime Hours: 5
• Bonus: $100.00
• Pre-Tax Deductions: $100.00
• Federal Tax Rate: 15%
• State Tax Rate: 5%

Step-by-Step Breakdown:

1. Regular Pay: $25.00/hour * 40 hours = $1,000.00
2. Overtime Pay: $25.00/hour * 1.5 * 5 hours = $187.50
3. Gross Pay: $1,000.00 (Regular) + $187.50 (Overtime) + $100.00 (Bonus) = $1,287.50
4. Taxable Gross Pay: $1,287.50 (Gross Pay) – $100.00 (Pre-Tax Deductions) = $1,187.50
5. Social Security Tax (6.2%): $1,187.50 * 0.062 = $73.63
6. Medicare Tax (1.45%): $1,187.50 * 0.0145 = $17.22
7. Federal Income Tax (15%): $1,187.50 * 0.15 = $178.13
8. State Income Tax (5%): $1,187.50 * 0.05 = $59.38
9. Total Deductions: $100.00 (Pre-Tax) + $73.63 (SS) + $17.22 (Medicare) + $178.13 (Federal) + $59.38 (State) = $428.36
10. Net Pay: $1,287.50 (Gross Pay) – $428.36 (Total Deductions) = $859.14

This example demonstrates how various factors combine to determine the final amount you receive in your paycheck.

Estimated Paycheck Breakdown:

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