Everhour tracks work time and time off, giving payroll teams cleaner totals before wage and withholding calculations begin.
Enter gross salary and tax rates to instantly see net pay and your effective combined tax rate — monthly, bi-weekly, or weekly.
The calculator gives you the number — Everhour takes it from there.
One click and you're timing. Start a timer, add an entry, edit the details. This is exactly how it feels in Everhour.
Set a budget, assign rates, and get alerted before you're over.
Measurement
Track your budget through time or costs
Every report you need — configured your way, always up to date.
Tracked hours flow straight into a polished invoice — no copy-paste, no manual math.
Payroll hours answer a practical question: how many hours should this employee be paid for this pay period, and which hours belong in each pay category? The answer usually separates hours actually worked from paid time not worked, such as vacation, sick leave, or holidays provided by policy or contract. That separation matters because paid leave can increase gross wages without creating federal overtime hours under the FLSA.
For U.S. payroll, the calculation starts before taxes. You total payable hours, apply the correct hourly rates, then use taxable wages for federal income-tax withholding under Form W-4 and IRS Publication 15-T. Employee Social Security and Medicare withholding come after gross pay is known. State income withholding, payday frequency, SUTA wage bases, and paid-leave mandates depend on state law.
Start with daily time records inside one pay period. Add hours actually worked, split covered nonexempt overtime under the federal baseline when worked hours exceed 40 in a fixed 168-hour workweek, then add paid time not worked according to the employer policy, contract, or state rule that provides it. Covered nonexempt employees must receive at least 1.5 times the regular rate for hours worked over 40, and averaging two weeks together is not permitted.
For example, a covered nonexempt employee earns $33 per hour, works 42 hours in one fixed workweek, and has 8 hours of paid vacation in the same pay period. Payroll records 40 regular worked hours, 2 overtime hours, and 8 paid vacation hours. Gross pay is 40 × $33, plus 2 × $33 × 1.5, plus 8 × $33, for a total of $1,683.00.
The common mistake is treating every paid hour as an overtime hour. The FLSA does not require pay for time not worked, including 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, but it does not become hours actually worked for federal overtime math.
Payroll records should keep at least three columns before gross pay: worked hours, paid leave hours, and overtime hours. That structure prevents a vacation day from inflating overtime, and it also keeps tax treatment clearer when leave is paid separately. The same separation helps when a state rule, collective bargaining agreement, employer policy, or employment contract gives paid leave rights beyond the federal FLSA baseline.
A one-off calculation is enough when you have one employee, one pay period, a confirmed hourly rate, and clean daily totals. The result gives payroll a fast gross-pay check before federal withholding, FICA, and state withholding rules apply. It also helps catch simple errors, such as adding paid vacation into the overtime base or averaging hours across two workweeks.
A managed workflow becomes necessary when multiple people submit time, managers approve corrections, paid leave carries into timesheets, or payroll needs an audit trail. Everhour Time Off tracks vacations, sick leave, and custom leave types with partial-day durations, accruals, carryover, per-employee balances, request approval, and time-off data that flows into timesheets.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
High Performer
G2
Summer 2026
Best Ease Of Use
Capterra
Summer 2026
Rated in the top time trackers across G2, Capterra, and TrustRadius — with consistent praise for ease of use, integrations, and support.
Payroll hours include hours actually worked plus paid time not worked that an employer policy, contract, or law provides. Payroll should keep those categories separate. Worked hours drive wage and overtime calculations, while paid vacation, sick leave, or holidays can increase gross wages without counting as hours worked under the federal FLSA overtime baseline.
Use the fixed workweek first. Covered nonexempt employees must receive overtime pay at not less than 1.5 times the regular rate for hours worked over 40 in a fixed 168-hour workweek. Payroll cannot average a 46-hour week with a 34-hour week to avoid federal overtime.
Paid vacation should be added to payable hours after worked time is classified. The FLSA does not require paid vacation, and paid time not worked does not create federal overtime hours. If an employer provides vacation pay, that pay is subject to withholding as wages, either regular wages or supplemental wages when paid as an additional lump sum.
Gross pay comes first. Federal income-tax withholding uses 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 $184,500 wage base, Medicare applies at 1.45% with no wage cap, and Additional Medicare withholding begins after wages exceed $200,000 for the calendar year.
Payroll hours can be calculated for weekly, biweekly, semimonthly, or monthly payroll, but the pay period must match the employer's payday rules and payroll system. The United States has no single national statutory payday frequency for private employers. State payday requirements control the required timing.
Everhour Time Off tracks vacations, sick leave, holidays, and custom leave types with full-day, partial-day, and custom-period entries. Approved time off can flow into team timesheet totals, so payroll reviewers can see paid leave beside worked time instead of rebuilding leave totals from separate records.
Everhour timesheets let employees submit weekly project hours or working hours for manager review. Managers can approve, reject, partially approve, and lock submitted time before payroll uses it, which gives accounting a cleaner approval trail for payable hours.
Track worked hours and approved leave in one review flow. Everhour carries time off into timesheets, giving payroll cleaner payable-hour totals and fewer manual corrections.
14-day free trial · No credit card · Cancel anytime
