Everhour tracks approved hours and overtime tiers, while payroll hours math turns time into gross wages.
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Payroll hours answer a practical pay-period question: how many payable hours does one worker have, and how much gross wage does that time create before withholding and deductions? The answer starts with the pay period, hourly rate, regular hours, overtime hours, paid time off if the employer provides it, and any separate premium category such as double time.
For U.S. federal baseline calculations, covered nonexempt employees must receive overtime pay at not less than one and one-half times the regular rate for hours worked over 40 in a fixed 168-hour workweek. Hours from two or more weeks cannot be averaged to avoid overtime. State law, contracts, or employer policy can add stricter pay rules.
Start with regular hours at the straight-time rate. Then multiply overtime hours by the regular rate and the applicable premium multiplier. For a covered nonexempt employee earning $26 per hour who works 47 hours in one fixed workweek, the first 40 hours pay at $26, and the 7 overtime hours pay at $39.
The gross wage calculation is: 40 regular hours × $26 = $1,040. Overtime uses $26 × 1.5 = $39, then 7 overtime hours × $39 = $273. Total gross wages are $1,040 + $273 = $1,313. Payroll then applies federal income-tax withholding under Form W-4 and IRS Publication 15-T, plus employee Social Security and Medicare where applicable.
Do not mix hours actually worked with paid time not worked when checking the federal overtime rule. The FLSA does not require pay for vacation, sick leave, or holidays, but paid vacation that an employer provides is subject to withholding as wages. Employer policy can make that time payable without making it hours worked for federal overtime.
Pay frequency also changes the worksheet around the hours. The United States does not use one national statutory payday frequency for private employers. Weekly, biweekly, semimonthly, and monthly pay periods are common, and state payday rules set the timing requirements. For hourly payroll, keep the workweek overtime check separate from the pay-period paycheck layout.
A one-off calculation is enough when you need to verify one employee's gross wages, check a timesheet total, or explain why a paycheck changed after overtime. It also works for a quick estimate before federal withholding, employee Social Security, employee Medicare, state withholding, deductions, and employer-side taxes enter the payroll run.
A managed workflow matters when payroll uses repeated approvals, daily or weekly overtime limits, 1.5x and 2x tiers, and a handoff to reports. Everhour Overtimes can show overtime in Team Hours and calculate overtime pay and gross pay from employee hourly cost and tracked time, which keeps the payroll review tied to approved hours.
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 totals include payable work time for the pay period, plus any paid time not worked that the employer policy or contract treats as payable. For overtime under the federal baseline, covered nonexempt employees use hours actually worked over 40 in a fixed 168-hour workweek. Paid vacation can be paid and withheld as wages without counting as hours worked for federal overtime.
Federal overtime for covered nonexempt employees uses a fixed 168-hour workweek, even when the paycheck covers a longer period. A biweekly paycheck can include two separate workweeks, and each workweek needs its own overtime check. Averaging 36 hours in one week and 44 hours in the next week does not erase the 4 overtime hours in the second week.
After gross wages are calculated, U.S. employers withhold federal income tax using the employee's Form W-4 and IRS Publication 15-T methods. For wages paid in 2026, employee Social Security applies at 6.2% up to the $184,500 annual wage base, and Medicare applies at 1.45% with no wage cap. Additional Medicare withholding starts when wages exceed $200,000 for the year.
Employer payroll taxes do not reduce the employee's gross pay or net pay directly. Employers separately calculate matching Social Security and Medicare taxes, FUTA on the first $7,000 of annual wages, and state unemployment or state and local payroll taxes where required. Those employer costs belong in labor-cost planning, not in the employee's gross-to-net subtraction.
Paid vacation can be entered as payable time when the employer provides it, and the payment is subject to withholding as regular wages or supplemental wages when paid as an additional lump sum. For federal overtime under the FLSA, paid vacation is time not worked. Keep it separate from hours actually worked when testing the 40-hour overtime threshold.
Everhour Overtimes supports daily and weekly overtime limits, regular, 1.5x overtime, and 2x double-overtime tiers. Team Hours can surface overtime visibility, and the Payroll dashboard calculates overtime pay and gross pay from employee hourly cost and tracked time when the Overtime app is enabled.
Everhour Reporting turns logged time, costs, and project data into customizable reports with columns, grouping, filters, and date ranges. Saved reports can be exported as CSV, Excel/XLSX, or PDF, giving payroll reviewers a clean file of approved time data for spreadsheet checks or records.
Set overtime rules, review Team Hours, and calculate gross pay from approved tracked time before payroll export. Everhour Overtimes gives teams a clearer payroll review.
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