Hourly Payroll
How to calculate an hourly pay stub.
Begin with verified hours and pay rates, calculate each earnings category, add them to gross pay, apply valid taxes and deductions, and confirm that the result equals net pay.
Hourly pay stub formula
For straight-time wages, multiply hours worked by the applicable hourly rate. Keep regular hours, overtime hours, bonuses, commissions and other earnings on separate lines whenever different rates or treatments apply.
Example: 40 regular hours at $20 per hour produces $800 in regular gross earnings before taxes and deductions. This simplified example does not include overtime, multiple rates, tips or other compensation.
A reliable five-step process
1. Confirm the pay-period start and end dates and the payment date. 2. Reconcile hours with authorized time records. 3. Multiply each group of hours by its correct rate. 4. Add all earnings to determine gross pay. 5. Apply current withholding and authorized deductions, then verify net pay.
Do not estimate hours from memory or reuse an old pay stub. Corrections should be based on source records such as approved timecards, payroll reports and documented rate changes.
Handling overtime and multiple rates
Covered, nonexempt employees generally receive overtime under federal law after more than 40 hours in a workweek, but exemptions, the regular-rate calculation and state rules can change the result. Review the U.S. Department of Labor overtime resources and our overtime pay stub guide.
When an employee works at more than one rate, list the hours and earnings clearly enough to reproduce the calculation. Confirm the applicable regular rate rather than assuming overtime is always one-and-one-half times the employee’s most familiar hourly rate.
Final review checklist
Confirm the worker and employer names, pay frequency, pay dates, regular and overtime hours, each rate, gross earnings, taxes, benefits, other deductions, net pay and YTD totals. Compare the new YTD figures with the immediately preceding record.
Frequently asked questions
How is regular hourly pay calculated?
Multiply verified regular hours by the applicable regular hourly rate.
Should overtime be a separate line?
A separate line improves clarity and may be required by applicable wage-statement rules.
What if the employee has two rates?
Track hours at each rate separately and verify the legally applicable regular-rate and overtime calculation.
Reviewed August 26, 2026. General educational information, not legal, tax, accounting or payroll advice. See our editorial standards and responsible-use policy.
Create a clear hourly pay stub.
Enter accurate, authorized information and review every figure before generating.