To calculate gross pay, add up everything earned in the pay period before any tax or deduction comes out. For hourly work that is hours times the rate, plus overtime at its own rate, plus any tips, bonuses or commissions paid that period.
For a salary it is the yearly amount divided by the number of paydays, adjusted when someone works only part of a period.
Below, both are worked with real numbers from our payroll engine, including a case most guides skip: a salaried first or last paycheck for a partial period. If you want the difference between gross and take-home pay first, our guide to gross pay vs net pay covers that.
Hourly gross pay, worked line by line
Take an invented barista at an Atlanta coffee roaster, paid every two weeks. In this period they worked their regular schedule, picked up a little overtime and had card tips paid out through payroll. Each line on the stub is one multiplication or one amount:
| Earnings line | How it is worked out | Amount |
|---|---|---|
| Regular pay | 80 hours × $15.25 | $1,220.00 |
| Overtime (1.5x) | 2.5 hours × $22.88 | $57.19 |
| Tips | Tips reported and paid through payroll | $186.40 |
| Gross pay for the period | $1,463.59 | |
| Gross pay so far this year (YTD) | $28,284.58 | |
The steps are the same for any hourly worker:
- Regular pay. Regular hours in the period times the hourly rate.
- Overtime. Hours over 168 in a workweek times 1.5 the regular rate. Count it week by week, not across the whole pay period; our guide on how to calculate overtime shows why that matters.
- Other paid hours. Holiday, vacation or sick hours at whatever rate your policy sets.
- Extras. Tips run through payroll, bonuses and commissions paid this period.
- Add them up. The total is gross pay, the figure every tax line on the stub starts from.
The overtime rate in the table has three decimals. Time and a half rarely lands on whole cents, so payroll multiplies with the exact rate and rounds only the line total. Rounding the rate first can put a stub off by a cent or two, which is enough to make a year-to-date check fail.
Salaried gross pay per paycheck
For a full pay period the math is one division: yearly salary over the number of paydays. Weekly pay divides by 52, every two weeks by 26, twice a month by 24 and monthly by 12. Our page on pay periods in a year covers the years that have an extra biweekly payday.
A salaried paycheck does not change with the number of days in the month. A semimonthly employee gets the same gross for a short February period as for a long August one, because the salary is a fixed amount per period, not a daily wage.
When a salaried employee works part of a period
The full-period rule stops working on a new hire’s first paycheck and a leaver’s last one. Federal rules let an employer pay an exempt employee a proportionate share of salary in the first and last week of employment, but they do not say how to work out the share. Payroll systems use one of three methods, and they disagree:
| Method | Calculation | First paycheck gross |
|---|---|---|
| Workdays in this period | $2,437.50 × 8 of 11 weekdays | $1,772.73 |
| Daily rate from the year | $58,500 ÷ 261 weekdays in 2026 × 8 days | $1,793.10 |
| Calendar days | $2,437.50 × 11 of 16 days | $1,675.78 |
| Gap between the highest and lowest method | $117.32 | |
The workday method treats the period as its own unit: the new hire worked most of its weekdays, so they get that share of a normal paycheck. The yearly daily rate ignores how long this particular period is. Calendar days count weekends too, which shortchanges anyone who starts midweek.
None of the three is wrong. What matters is consistency: choose one, write it into the payroll policy and use it for every start and every exit. Switching methods case by case invites the complaint that someone was paid less than a colleague who started the same week.
Commissions, bonuses and other add-ons
Variable pay goes into gross in the period it is paid, not earned. A commission on September sales paid on October 15 is October gross. The same goes for a bonus, even a yearly one paid in a single check; our guide to the bonus tax rate explains how that check is withheld.
Some items look like pay but stay out, and one is in gross for tax only. Here is the full list:
| Pay item | In gross pay? | Note |
|---|---|---|
| Regular hours or salary | Yes | The base of every gross pay figure |
| Overtime, shift differentials, holiday pay | Yes | Paid at their own rates on top of regular pay |
| Bonuses and commissions | Yes | In the period they are paid |
| Tips paid through payroll or reported to the employer | Yes | Reported tips count even when the cash came from customers |
| Paid time off: vacation, sick, jury duty | Yes | Paid hours, even though no work was done |
| Taxable fringe benefits, such as group-term life over the tax-free limit | Yes, as taxable wages | Added for tax but not paid in cash |
| Expense reimbursements under an accountable plan | No | Repayment of costs, shown below net pay |
| 401(k) and other pre-tax deductions | Still in gross | They come out after gross is set, and lower taxable wages instead |
The last row trips people. A 401(k) contribution does not lower gross pay. It comes out after gross is set and lowers taxable wages instead, which is why box 1 of a W-2 can be smaller than the gross shown on the final stub of the year. Our guide to pre-tax deductions shows the effect.
Checking the gross on your own pay stub
- Multiply it back. Hours times rate on each earnings line should match the amount to the cent.
- Check overtime by workweek. Two weeks of uneven hours can mean fewer overtime hours than the period total suggests.
- Check the YTD column. Last stub’s year-to-date gross plus this period’s gross should equal this stub’s year-to-date gross. Our guide to YTD on a pay stub walks through it.
- Annualize carefully. Gross per paycheck times paydays gives a yearly figure only if every period is a full one.
Employers can skip the arithmetic: our free pay stub generator builds gross pay line by line from hours, rates, overtime and extras, carries year-to-date totals across pay dates and shows the result as a stub before you download it.
Sources: 29 CFR 541.602, salary basis; U.S. Department of Labor, Overtime pay. Example amounts from our pay stub engine; weekday counts from the 2026 calendar. Checked October 30, 2026.
