An easy way to calculate payroll hours is to convert the hours on the time card into military time and subtract the check-in time from the check-out time, reports Chron. Employers should then subtract unpaid lunch time and breaks from the result to get the payroll hours.
Employers convert the time an employee has worked to military time by adding 12 to the hours after noon, explains AZ Central. They then subtract the check-in time from the check-out time to come up with the total number of hours the employee was in the workplace.
If the employee stepped out for an unpaid lunch break, the employer subtracts the amount of time the employee was on break from the total number of hours he was in the workplace. If an employee has an eight-hour work shift, any time worked after the standard eight hours is considered overtime, according to AZ Central.
Employers add the total payroll hours in a week to come up with the weekly payroll hours, according to Chron. They calculate the gross pay by multiplying the total weekly payroll hours by the hourly rate, while factoring in any overtime. Typically, employers calculate overtime at a rate of 1.5 times the hourly rate. For example, if an employee worked for 50 hours in a week at a rate of $12 an hour, the employer multiplies 40 hours by $12 to get $480. He then calculates the overtime rate by multiplying $12 by 1.5 to get $18 an hour. He obtains the overtime pay by multiplying $18 by ten hours to get $180, resulting in a gross weekly pay of $660.