![\"Gross](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2023\/02\/Gross-vs-net-cover.png\")
<\/figure>\n<\/div>\n\n\nWhat is gross salary? <\/h2>\n\n\n\n
Gross pay (gross salary) refers to <\/strong>employees’ earnings prior to deductions from their wages<\/strong><\/a>. So, it presents the salary you receive from your employer. <\/p>\n\n\n\n Bear in mind that gross pay is not<\/strong> the amount of money you take home, as it includes taxes and other deductions that have to be taken out of your pay before it reaches your bank account.<\/p>\n\n\n\n Gross pay is different from gross income<\/em>, as gross income refers to all of your earnings before taxes<\/strong>, not only the ones you receive from your employer. According to IRS<\/a>, gross income includes:<\/p>\n\n\n\n To make sure that you get a good understanding of gross pay, I decided to contact different experts and ask them how they would define parts of an employee\u2019s gross salary. <\/p>\n\n\n\n One of these experts is a certified public accountant (CPA) at Oak View Law Group, Levon Galstyan. Here\u2019s how Levon explained the meaning of gross pay:<\/p>\n\n\n\n \u201cGross pay includes salary, hourly wage, reimbursements, bonuses, commissions, and overtime pay. To calculate gross pay, any commission, reimbursement, or bonuses owed to the employee should be added to their wages.\u201d<\/em><\/p>\n<\/div>\n<\/div>\n\n\n\n Moreover, an accountant at Keirstone Limited, Francis Fabrizi, provided an example of gross salary: \u201cIf an employee earns a salary of \u00a350,000 per year, their gross pay would be \u00a350,000.\u201d<\/em><\/p>\n\n\n\n Therefore, gross pay presents the salary you agreed to with your employer, and it includes your wages, overtime, bonuses, and reimbursements. <\/p>\n\n\n\n Calculating your gross pay is quite straightforward, as it presents the salary you agreed with your employer. <\/p>\n\n\n\n Gross pay includes:<\/p>\n\n\n\n The exact steps to calculate your gross pay will depend on whether you are a salaried or hourly employee<\/a>. <\/p>\n\n\n\n I brought some reinforcements when it comes to calculating your gross pay if you\u2019re an hourly worker as well! Levon Galstyan provided steps to calculating gross wage per hour:<\/p>\n\n\n\n Pay periods present how often<\/em> you get paid. They depend on the agreement you have with your employer and are usually part of your employment contract. <\/p>\n\n\n\n Let\u2019s say that you\u2019re a software engineer in the United States and you want to calculate your weekly gross pay. The average hourly wage for a software engineer in the US equals $36<\/a>. Let\u2019s also assume that you get paid weekly. <\/p>\n\n\n\n You tracked 40 regular hours and 2 hours of overtime for the previous week. <\/p>\n\n\n\n We\u2019ll first calculate your regular earnings. You should multiply your regular rate ($36) by the number of regular workweek hours (40 in this case) to get your earnings for regular hours worked:<\/p>\n\n\n\n $36 x 40 = $1,440<\/em><\/p>\n\n\n\n Since you are a non-exempt employee<\/a> \u2014 the FLSA rules for overtime<\/a> will apply. Thus, your hourly overtime<\/a> rate will be one and a half (1.5) times your regular rate of pay<\/strong>: <\/p>\n\n\n\n $36 x 1.5 = $54<\/em><\/p>\n\n\n\n Next, since you worked 2 overtime hours, you have to multiply your overtime rate ($54) by the number of overtime hours (2 hours) you worked to get your weekly overtime earnings:<\/p>\n\n\n\n $54 x 2 = $108<\/em><\/p>\n\n\n\n Once you calculate both regular and overtime earnings, the calculation will go like this:<\/p>\n\n\n\n $1,440 + $108 = $1,548<\/strong><\/em><\/p>\n\n\n\n So, your weekly gross pay is $1,548.<\/strong><\/p>\n\n\n\n \ud83d\udca1 Clockify Pro Tip<\/strong><\/p>\n\n\n\n If you\u2019re having trouble understanding your overtime earnings, you can use this overtime calculator:<\/p>\n\n\n\n Levon Galstyan provided us with a process of calculating gross earnings based on your yearly salary as well. To get your gross earnings as a salaried worker, you should:<\/p>\n\n\n\n Divide the annual salary by the number of pay periods in a year<\/em><\/strong><\/p>\n\n\n\n There are four common payment frequency schemes: weekly, biweekly, semi-monthly, and monthly. Out of these four schemes, 45.7%<\/a> of US employees are paid biweekly. <\/p>\n\n\n\n If you receive your salary once a week<\/strong>, you\u2019ll have 52 pay periods<\/strong>. Therefore, to calculate your weekly earnings, you should divide your annual earnings by 52<\/strong>. <\/p>\n\n\n\n In case you\u2019re paid biweekly<\/strong>, you\u2019ll have 26<\/strong> pay periods<\/strong>. <\/p>\n\n\n\n Moreover, employees that receive a salary twice a month<\/strong> will have 24<\/strong> pay periods<\/strong>, while those who are paid monthly<\/strong> should divide their annual earnings by 12<\/strong>. <\/p>\n\n\n\n\n
![\"Levon](\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2023\/02\/Levon.jpeg\")
<\/figure>\n<\/div>\n\n\n\nHow to calculate gross pay<\/h3>\n\n\n\n
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Calculating gross wages for hourly workers <\/h4>\n\n\n\n
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Calculating gross earnings for salaried workers <\/h4>\n\n\n\n
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