How to Add Payroll Time

The employer is responsible for ensuring that employees are paid accurately and on time. Employees depend on their paychecks to sustain their livelihoods; therefore, when a paycheck comes up short--or is not paid at all--they get upset. The employer can lessen the likelihood of this happening by correctly computing the payroll time.

  1. Figure regular hours worked. Most employers use a timekeeping system, such as a time clock or time sheet to track hourly employee time. Get the hours worked from the time card/time sheet. Regular hours are hours worked up to 40. For example, if the employee worked Monday through Friday, 8 a.m. to 5 p.m., with an hour of unpaid lunch, pay him 8 regular hours for each day, which equals 40 regular hours for the five days of work. Pay the regular hours at his regular pay rate.

  2. Calculate overtime, which is hours worked in excess of 40. For example, if the employee worked Monday to Saturday, 8 a.m. to 6 p.m. with an hour of unpaid lunch. Pay her 9 hours for each day, which equals 54 hours. Pay 40 hours at her base pay rate and the remaining 14 hours at her overtime rate--time and a half (1.5) her base pay rate.

  3. Figure double-time hours. If the employer pays double-time for hours worked beyond the employee’s regular work time, such as weekends and holidays, pay them at twice his normal pay rate.

  4. Pay benefit days at the employee's regular pay rate. These days include vacation, sick, personal time and holidays.

  5. Add up salary time. Salaried workers are generally paid a set income each pay period. But, in certain instances, such as new hire, termination or overpayment deduction, you might have to prorate her pay. If applicable, pay her or dock her pay based on her daily rate. For example, if her annual salary is $53,000. Calculate as follows: 53,000 / 52 weeks / 5 days = $203.85 per day.

  6. Tip

    Always convert payroll minutes to decimals: 15 minutes = 0.25; 30 minutes is 0.50; and 45 minutes is 0.75. For instance, 3 hours and 45 minutes = 3.75 hours.

    Once you have figured the gross wages, withhold federal, state (if applicable), Social Security and Medicare taxes. In addition, deduct child support and garnishments, if applicable. Then, deduct voluntary deductions such as health and retirement benefits. The result is the employee’s net income.