About these answers
This page collects answers to the most common questions we hear about payroll calculations. Each question links to a related guide or calculator for deeper detail.
The answers below cover U.S. federal rules and common state variations. Specific rules can vary by employer, state, workplace policy, and union contract, always confirm specifics with your employer or HR department.
Payroll math basics
How is gross pay calculated?
Gross pay = total payroll hours × hourly rate. For salaried employees, gross pay is the salary divided by the number of pay periods per year.
What is decimal time?
Decimal time expresses minutes as a fraction of an hour. 8h 30m = 8.50 decimal hours. Payroll uses decimal time so multiplying by an hourly rate is direct math.
How do I deduct lunch?
Subtract unpaid lunch minutes from the gross shift time. A 9-hour shift with a 30-minute lunch becomes 8.5 paid hours.
Overtime questions
What's the federal overtime rule?
Non-exempt employees get 1.5× their regular rate for hours over 40 in a workweek. The workweek is a fixed, recurring 7-day period.
Does PTO count toward overtime?
Generally no. Paid time off is paid, but it usually doesn't count as "hours worked" for the 40-hour threshold.
Rounding and timekeeping
Is the 7 minute rule a law?
It's a widely used interpretation of the FLSA's allowance for time clock rounding. The rule itself isn't named in federal regulations, but the practice is permitted as long as it's neutral.
Can my employer always round down?
No. Rounding must be neutral over time. Always rounding in the employer's favor can violate FLSA rules.
Pay structure
Hourly vs salary, which earns more?
Depends on hours worked, overtime eligibility, benefits, and total compensation. Hourly with frequent overtime can outearn an equivalent salary; exempt salaried roles often work unpaid extra hours.
What's the conversion formula?
Salary to hourly: divide salary by (weeks × hours/week). Hourly to salary: multiply hourly × hours/week × weeks/year.
Important note
These FAQs cover general U.S. payroll concepts. Calculator results are estimates only and should not replace official payroll, tax, legal, accounting, or HR advice. Always confirm specifics with your employer, payroll provider, or qualified professional.