Hourly Paycheck and Payroll Calculator

Calculating your hourly rate is pretty straightforward. Start by figuring out how much you want to pay your employee annually or monthly (or how much you get paid annually if you’re doing the calculations for yourself). Then, divide that amount by the number of hours worked in a year or a month.

For example, if someone makes $50,000 a year, and they’re working a standard 40-hour week, here’s how you’d break it down:

Annual Salary: $50,000
Hours Per Week: 40
Weeks Per Year: 52

So, the total number of hours worked in a year is 40 hours/week × 52 weeks/year = 2,080 hours.

Now, divide the annual salary by the total hours: $50,000 ÷ 2,080 hours = $24.04 per hour. If you want to give your employee a few weeks of paid vacation, you don’t need to make any changes to this calculation, as you will be treating those weeks as if they’re working regular hours as far as paychecks are concerned. 

But if you want to know the effective hourly rate including vacation time, you can subtract those weeks from the total number worked. So for three weeks of vacation, you would use 40 hours/week × 49 weeks/year = 1,960 hours, which comes out to $25.51 per hour. 

Easy peasy! If you’re working with a monthly salary instead, just divide the annual amount by 12 to get the monthly salary, and then use the same approach. Of course, this is gross salary, not net, so there are still some additional calculations needed to know how much an employee will take home.

Gross pay is the amount an employee receives before any taxes or deductions are taken out. When you accept a job offer, gross pay is most commonly the amount you’ll be quoted by the employer, but it’s not the amount you’ll take home at the end of the pay period. The amount you take home after taxes is known as net pay or take-home pay.

Pay frequency is simply how often you get paid. It’s the schedule on which an employer disburses paychecks to employees. Different companies use different pay frequencies, but most likely your company will pay using one of the following:

Weekly: You get paid every week, usually on the same day each week (e.g., every Friday). This means you’ll have 52 paychecks a year.

Biweekly: You get paid every two weeks, typically on the same day every other week (e.g., every other Friday). This results in 26 paychecks a year.

Semi-monthly: You get paid twice a month, usually on set dates like the 15th and the last day of the month. This totals 24 paychecks a year.

Monthly: You get paid once a month, on a specific date each month (e.g., the first of the month). This results in 12 paychecks a year.

Your pay frequency can affect your budgeting and cash flow, so it’s important both for employees and employers to consider what works best.

Gusto’s hourly paycheck calculator can! Just select the button above that says “add overtime,” and then enter the overtime rate and number of hours. If you have more complicated overtime, such as a certain number of hours at time-and-a-half plus additional hours at double time, you’ll need to do some manual calculations.

It sure can! Our hourly paycheck calculator helps you figure out how much you’ll be taking home each pay period based on your hourly rate and the number of hours you work. By knowing your paycheck amount in advance, you can plan your expenses better and manage your finances more effectively.

For example, if you know you’re making $20 an hour and working 40 hours a week, you can easily calculate your weekly or monthly earnings. This way, you can set up a budget that aligns with your income, track your spending, and ensure you’re saving enough. 

As an employer, our hourly paycheck calculator will help you better understand how much your employees are taking home at the end of the day, so you can be sure to provide competitive wages and benefits.

Calculating taxes is no easy feat. That’s why our hourly paycheck calculator is here to handle the tough stuff. You’ll need to know some specific numbers such as hourly rate, pay frequency, and number of hours worked, as well as withholding, dependent, and deduction information. Taxes also vary depending on what state you live in. Once you’ve gathered the info, our calculator handles the rest.

Federal withholding, or federal income tax, is calculated based on several factors, including your income, filing status, and allowances or deductions. Here’s a simple breakdown:
Determine Your Gross Income: Start with your total earnings before taxes.
Find Your Filing Status: Your tax bracket depends on whether you’re single, married, head of household, etc. Each status has different income thresholds.
Use the IRS Withholding Tables: Employers use IRS tables to figure out how much to withhold. These tables are based on your income and how often you’re paid (weekly, biweekly, etc.). Your employer will look up your income in these tables to find the amount of federal tax to withhold. Or, if your employer uses Gusto, we’ll make sure you’re withholding the correct amount.
Adjust for Allowances: When you fill out a W-4 form, you can claim allowances. The more allowances you claim, the less tax is withheld from your paycheck. But remember, claiming too many allowances might mean you owe taxes at the end of the year.
Account for Additional Deductions or Adjustments: If you have extra deductions or adjustments, like contributions to retirement plans, these can also affect your withholding.
Your employer uses this information to withhold the right amount of federal income tax from each paycheck, so you’re less likely to have a big tax bill come April.

Gusto’s hourly paycheck calculator allows you to easily determine take-home pay including complex calculations for federal tax withholdings, benefits and deductions, and state income tax. Simply gather the information needed, drop it in our calculator, and voila! If there are any numbers you’re not sure of, don’t stress it. Just know that the calculator can only be as accurate as the information you provide. For instance, if you’re not sure if you’ll have healthcare or retirement benefits, or how much they’ll cost, you can leave that blank.

The more information you have, the more accurate the calculator can be. But at the bare minimum you’ll need to know:

State where the employee pays taxes
Hourly rate
Pay frequency

This will give you a general idea of take-home pay per paycheck. After that, you can specify your or your employee’s tax filing status (single, married, etc.), number of dependents claimed, and any allowances taken that would reduce withholdings. Having access to a completed W-4 form is the easiest way to get accurate information. Finally, for the most accurate picture of take-home pay, add or estimate information about healthcare and retirement deductions. If you’re looking to calculate take-home pay for a salaried employee instead of hourly, check out our salary paycheck calculator instead.

State income taxes vary across all 50 states, so it’s important to know where your employee will be paying taxes in order to accurately estimate take-home pay. With Gusto’s hourly paycheck calculator, we add custom fields depending on your state to give the most accurate estimate of state tax withholdings, no matter where in the U.S. your employees call home.