Gross Pay: Hours, Overtime and Commission

0:00A worker earns $18.50 an hour and works 46 hours this week. What is their gross pay?

0:08Gross pay is your total pay before deductions, such as taxes. Net pay is what is left after them.

0:16Here, hours past 40 in a week are overtime, paid at time and a half: 1.5 times the regular rate.

0:25Overtime rules depend on the place and the job.

0:28So split the 46 hours into 40 regular hours and 6 overtime hours.

0:35Regular pay is 40 times $18.50, or $740.

0:42The overtime rate is 1.5 times $18.50, or $27.75 an hour.

0:51Overtime pay is 6 times $27.75, or $166.50.

0:59Add them: $740 plus $166.50 gives a gross pay of $906.50.

1:10Check another way: all 46 hours at $18.50 is $851. The extra half rate, $9.25, for 6 hours adds $55.50. Together, $906.50.

1:29A common mistake is paying all 46 hours at time and a half: $1276.50, which is too much. Only the 6 overtime hours earn time and a half.

1:43Some jobs pay a base salary, a fixed amount, plus commission, usually a percentage of sales.

1:50This week, a salesperson has a $500 base salary, plus 4% commission on $12,000 of sales.

1:594% of $12,000 is 0.04 times $12,000, which is $480.

2:08Check: 1% is $12,000 divided by 100, or $120, so 4% is 4 times $120, or $480.

2:22Add the base salary: $500 plus $480 gives a gross pay of $980.

2:31Gross pay is all you earn, such as regular pay, overtime and commission, before deductions.