How to Calculate Gross Pay (Hourly & Salary)

Gross pay is an employee's total earnings before any deductions — the starting point for every paycheck. Calculating it is straightforward, but it works differently for hourly and salaried employees, and overtime adds a step. This guide gives you the formulas and worked examples for each.

Gross pay for hourly employees

The formula is:

Gross pay = (regular hours × hourly rate) + (overtime hours × overtime rate)

Overtime is usually 1.5× the rate for hours over 40 in a workweek. So for someone at $19/hour who works 45 hours:

• Regular: 40 × $19 = $760
• Overtime: 5 × ($19 × 1.5) = 5 × $28.50 = $142.50
• Gross pay: $902.50

If there's no overtime, it's simply hours × rate.

Gross pay for salaried employees

For a salary, divide the annual figure by the number of pay periods:

Gross pay per period = annual salary ÷ pay periods per year

Pay periods per year: 52 (weekly), 26 (biweekly), 24 (semi-monthly), or 12 (monthly). So a $60,000 salary paid biweekly is:

$60,000 ÷ 26 = $2,307.69 per paycheck

Don't forget additional earnings

Gross pay also includes anything else earned in the period:

• Bonuses and commissions
• Shift differentials (extra pay for nights or weekends)
• Holiday or double-time pay
• Tips, where applicable

Add these to the base calculation for total gross pay. Note that some bonuses can raise the "regular rate" used for overtime.

A combined example

A salaried employee earns $52,000 a year (paid biweekly) plus a $500 commission this period:

• Base: $52,000 ÷ 26 = $2,000
• Commission: $500
• Gross pay: $2,500

Accurate hours, accurate gross pay

For hourly staff, gross pay is only as accurate as the hours recorded — and overtime is easy to miscalculate by hand. Timesheet Maker totals regular and overtime hours by workweek and exports payroll-ready gross figures, so the calculation starts from correct numbers every time.

Frequently asked questions

How do I calculate gross pay for an hourly employee? Multiply regular hours by the rate, add overtime hours times the overtime rate (usually 1.5×), plus any bonuses or tips. That total is gross pay.

How do I calculate gross pay for a salaried employee? Divide the annual salary by the number of pay periods (26 for biweekly, 24 for semi-monthly), then add any bonuses or commissions for the period.

Does gross pay include overtime? Yes. Gross pay includes regular pay plus overtime, bonuses, commissions, and any other earnings before deductions.

Is gross pay before or after taxes? Before. Gross pay is total earnings before taxes and other deductions; net pay is what's left after them.

Start every paycheck right

Use hours × rate plus overtime for hourly, or salary ÷ periods for salaried, and add extra earnings. To calculate gross pay from accurate hours, try Timesheet Maker free.