Wages and Pay Calculations

Learn how to calculate wages, gross pay, and overtime pay using basic formulas. Understand how hours worked, hourly rates, and overtime affect total pay.

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How to use this guide

This guide will teach you how to calculate weekly wages, gross pay, and overtime pay. Work through each section and apply the formulas to practice problems.

Big idea: Wages are based on hours worked and the hourly rate, and gross pay includes basic pay plus overtime pay when applicable.

What is Wages?

Wages are the amount of money paid to a worker based on the number of hours worked and the agreed-upon hourly rate.

Formula:

\[ \text{Wage} = \text{Hours Worked} \times \text{Hourly Rate} \]

Gross Pay Formula

Gross pay is the total earnings including basic pay and overtime pay.

\[ \text{Gross Pay} = \text{Basic Pay} + \text{Overtime Pay} \]

Overtime Pay

Overtime pay is the additional pay received for working beyond regular hours.

\[ \text{Overtime Pay} = \text{Overtime Hours} \times \text{Overtime Rate} \]

Example Problem

Problem: Jane works 40 hours per week at $15 per hour. What is her weekly wage?

Step 1: Calculate Wage

\[ \text{Wage} = 40 \times 15 = 600 \]

Step 2: Determine Gross Pay (No Overtime)

\[ \text{Gross Pay} = 600 + 0 = 600 \]

Answer: Jane’s weekly wage is $600.

Mixed Practice

Problem 1: John works 45 hours a week at $20 per hour. Overtime is paid at $30 per hour for any hours above 40. Calculate his gross pay.

Step 1: Calculate Basic Pay

\[ \text{Basic Pay} = 40 \times 20 = 800 \]

Step 2: Calculate Overtime Pay

\[ \text{Overtime Pay} = (45 - 40) \times 30 = 5 \times 30 = 150 \]

Step 3: Calculate Gross Pay

\[ \text{Gross Pay} = 800 + 150 = 950 \]

Answer: John’s weekly gross pay is $950.

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