Hourly payroll: What you need to know
- Hourly payroll for your employees comes with a lot of steps you must take to remain compliant and pay everyone accurately.
- Using an online payroll solution helps streamline the process by automating your payroll and taking the headache away from you.
- If you use Homebase’s top payroll service, we’ll make it even easier by submitting your error-free timesheets for you.
What are payroll hours?
Payroll hours are the hours in a week that your employee works and receives paid time for based on your small business payroll hourly rate. There are different types of payroll hours you can use to pay employees. Regular hours are typically the normal times your hourly worker is expected to work.
Overtime hours account for any time that goes over 40 hours a week. Non-exempt employees and non-salaried employees must be paid the correct overtime rate as well as the normal hourly rate for this extra time, according to the Fair Labor Standards Act (FLSA). Holiday hours sometimes require you to pay an overtime rate on top of the standard hourly wage as well.
Your employee’s regular hours determine whether or not they are full-time or part-time workers. They receive a specific hourly wage based on the hours they work. Whether you run on a semi-monthly payroll for hourly employees schedule or a bi-weekly payroll schedule, there are several options for how to do it.
Homebase can help make payroll easy by calculating employee wages for you and keeping track of your timesheets. We’ll even make sure there are no errors like missed breaks or early clock-ins, to both keep you compliant and make sure you’re not losing money on labor costs.
How is payroll for hourly employees calculated?
When it comes time to run payroll, you can either use a free payroll calculator hourly if you want to run it manually, or you can use an online payroll processing solution. If you want to do it manually, whether it’s restaurant payroll or payroll for salaried or hourly employees in another industry, it comes with a few complicated steps.
To determine paycheck calculations for hourly employees, you’ll need the following information:
- Hourly rate
- Gross pay
- Pay frequency
- Filing status
- Withholding information
- Other deductions
To calculate the gross pay for a non-salaried worker (meaning they aren’t paid on a salary basis), first figure out their hours worked during the semi-monthly pay period. Then multiply that by their hourly pay. For example, if your employee makes $10 an hour and worked 80 hours over 2 weeks, their gross pay would be $800.
From the gross pay you would then subtract payroll taxes and other deductions like benefits and more. It’s important to make sure you are deducting the right amount of taxes from each employee’s gross pay or you could face an audit from the IRS.
Consider using a payroll service that will do the hard work for you like Homebase. We’ll do it all for you.
Owner at Barzotto
What are the benefits of hourly payroll software?
With the plethora of complicated steps it takes to successfully run payroll while staying compliant and paying everyone accurately, using an online payroll solution for your small business that offers full-service payroll features is a great idea.
For starters, your payroll app will automate the entire payroll process for you, greatly reducing the hours you spend on the day of the month you do it yourself. They’ll even run payroll summary reports for you, which can be tedious on their own.
Using a payroll service can also help prevent payroll fraud among your team members by catching any manipulations they may have made to increase their pay.
And better yet, if you use a payroll service like Homebase, you can spend less time worrying about your employees’ paychecks and more time running your business.