How Pay from Hours and Overtime is Calculated
To find your pre-tax gross paycheck based on hourly work, the calculation separates regular hours from premium overtime hours:
Net Hours = Total Hours − Unpaid Breaks
Regular Pay = Regular Hours × Base Rate
Overtime Pay = Overtime Hours × Base Rate × Overtime Multiplier
Total Gross Pay = Regular Pay + Overtime Pay
Example Pay Calculation
Let's look at a week where an employee works 45 hours (deducting a 30-minute unpaid lunch break daily) at an hourly rate of $20.00:
| Earnings Component | Hours worked | Calculated Earnings |
|---|---|---|
| Total Clocked Hours | 45.0 hours | — |
| Lunch Break Deduction (5 days × 30m) | -2.5 hours | Unpaid |
| Net Hours Worked | 42.5 hours | — |
| Regular Hours Pay | 40.0 hours | $800.00 |
| Overtime Hours Pay (1.5x multiplier) | 2.5 hours | $75.00 |
| Total Gross Pay Estimate | $875.00 | |
Understanding Weekly vs. Biweekly Pay Schedules
Employers set different paycheck schedules depending on cash flow and corporate standards:
- Weekly Pay Periods: Employees receive 52 paychecks per year. Overtime is calculated on hours worked past 40 in that specific 7-day period.
- Biweekly Pay Periods: Employees receive 26 paychecks per year. While the paycheck covers two weeks of work, overtime rules still apply on a week-by-week basis (rather than totaling 80 hours).
- Semimonthly Pay Periods: Paid twice per month (usually the 15th and last day), resulting in 24 paychecks per year. Often used for salaried staff.