B- AUDIO by MCPSC Business Club
B- AUDIO by MCPSC Business Club Podcast
Payroll: Step by step calculation
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Payroll: Step by step calculation

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Calculate Your Employees' Gross Pay:

You can determine an employee’s gross pay using their pay rate and your scheduled pay periods. Most businesses will pay employees weekly, every two weeks, or monthly. To calculate an hourly employee’s gross pay, multiply their hours worked in the pay period by their hourly pay rate.

The formulae are as follows:

Hourly rate x total hours worked in the pay period = gross pay

To calculate a salaried employee’s gross pay, divide their annual salary by the number of pay periods in the year. The formula is as follows:

Yearly salary / number of pay periods in year = gross pay

For example. An employee makes $50,000 a year. Their company pays employees every two weeks for a total of 26 pay periods. Therefore, the employee’s gross pay is $1,923.08.

What Is the Difference Between Payroll and Salary?

This is a matter of perspective: For an employee, the money received from a company as compensation often comes in the form of wages or salary (as well as bonuses, stock options, commissions, etc.). For a firm, these payments are an expense that is recorded as payroll.

With computer systems, specialized software and scheduled payroll programs, a business uses technology to transfer payment to employees and contractors during each pay period

Source: https://www.investopedia.com/terms/p/payroll.asp

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