Everhour Timesheets keeps approved work-hour records organized before gross pay, withholding, and payroll review begin.
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Payroll hours answer a practical question: which hours belong in the paycheck, which hours qualify for overtime, and which dollar amount becomes the starting point for withholding. For hourly employees, the calculation starts with hours actually worked in the pay period. For covered nonexempt employees under the FLSA federal baseline, overtime pay applies after 40 hours worked in a fixed 168-hour workweek.
The result is a payroll-ready breakdown, not a full tax filing. Gross wages still feed into federal income-tax withholding under Form W-4 and IRS Publication 15-T, employee Social Security, Medicare, and any Additional Medicare withholding. State income withholding, state unemployment, payday frequency, and paid-leave mandates depend on state law, so the hour total is only the first layer.
Worked hours and paid time not worked need separate labels. The FLSA does not require pay for time not worked such as vacation, sick leave, or holidays. If an employer provides paid vacation, that vacation pay is subject to withholding as regular wages or as supplemental wages when paid as an additional lump sum.
This separation matters because paid time off can increase a paycheck without increasing FLSA overtime hours. For example, an employee with 38 hours actually worked and 8 paid vacation hours has 46 paid hours, but the paid vacation hours do not create federal overtime under the FLSA baseline. Payroll records should show 38 worked hours, 8 paid-time-off hours, and 46 paid hours.
For a covered nonexempt employee, calculate weekly overtime by adding hours actually worked in the fixed 168-hour workweek, then separating the first 40 hours from hours over 40. Federal law requires overtime pay at not less than one and one-half times the regular rate for covered nonexempt employees. Averaging hours over two or more weeks is not permitted.
Assume an employee earns $27 per hour and works 9, 8, 10, 7, and 11 hours across one workweek. Total worked hours are 45. Regular pay is 40 hours at $27, or $1,080. Overtime is 5 hours at $40.50, or $202.50. Gross wages for that workweek are $1,282.50 before federal withholding, FICA, and applicable state items.
A one-off calculator is enough when you need to verify one employee's hours, check a disputed weekly total, or estimate gross wages before taxes. It works best when daily time totals are already clean and the employee has one hourly rate, one workweek, and no approval or correction cycle.
A managed workflow becomes necessary when employees submit time weekly, managers approve or reject entries, and payroll needs a locked record. Everhour Timesheets collects weekly project hours and working hours by person, supports submitted time for review, and lets admins approve, reject, partially approve, and lock time entries before payroll or billing review.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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Payroll hours come from time actually worked, plus any paid time not worked that the employer provides. Scheduled hours show the planned shift. A person scheduled for 40 hours who works 43 hours has 43 worked payroll hours, and a covered nonexempt employee under the FLSA federal baseline needs overtime treatment for the 3 hours over 40 in that fixed workweek.
Paid vacation hours are paid time not worked. The FLSA does not require pay for vacation, sick leave, or holidays, and those paid hours do not count as hours actually worked for federal overtime. If vacation pay is provided, it is still subject to withholding as regular wages or as supplemental wages when paid as an additional lump sum.
Covered nonexempt employee overtime must be calculated within each fixed 168-hour workweek under the FLSA federal baseline. An employer cannot average a 46-hour week with a 34-hour week to avoid overtime. The 6 hours over 40 in the first week must be paid at not less than one and one-half times the regular rate.
Common errors include mixing paid time off with hours actually worked, rounding daily totals without a consistent policy, missing break deductions, and combining separate workweeks. A single 2-hour error at $27 per hour changes gross wages by $54 at straight time and by $81 if those hours are overtime at 1.5x.
Payroll hours produce gross wages first. Federal income-tax withholding then follows the employee's Form W-4 and IRS Publication 15-T tables or methods. Employee Social Security applies at 6.2% up to the 2026 wage base of $184,500, Medicare applies at 1.45% with no wage cap, and Additional Medicare withholding begins when annual wages paid exceed $200,000.
Everhour Timesheets collects weekly project hours and working hours by person so managers can review time before payroll or billing. Employees can submit time for approval, and admins can approve, reject, partially approve, or lock submitted entries to protect payroll records from late edits.
Use Everhour Timesheets to collect weekly hours, review submissions, lock approved entries, and keep payroll handoff records consistent before wage calculations move downstream.
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