👉 Payroll math involves calculating employees' gross pay, deductions, and net pay based on specific rules and regulations. To calculate gross pay, you multiply an employee's salary or hourly wage by the number of hours worked in a pay period. Common deductions include federal, state, and local taxes (like Social Security and Medicare), unemployment insurance, health insurance premiums, retirement contributions, and optional benefits like bonuses or stock options. The net pay is then determined by subtracting these deductions from the gross pay. Payroll systems often use formulas to ensure compliance with tax laws and regulations, and may also apply additional rules for things like overtime pay (typically 1.5 times the regular rate for hours worked beyond 40 in a workweek).
