How to Get Gross Pay: A 2025 Guide

With the average gross pay in the U.S. reaching $66.622, an employee learning how to calculate it isn’t exactly out of the norm. This is because knowing how much you’ll make in a month can give them a rough idea of how much they can take home after every deductible has been considered.

But what should be noted when it comes to calculating gross pay? Are there special stipulations that must be included before getting it? Read on to learn how to get gross pay, the laws surrounding it in different states, along with some examples along the way.

What is gross pay?

Gross pay can be summarized as the amount of money an employee earns. This means taxes, retirement funds, or any form of fringe benefits like lodging or meals are not included in the formula to get it. Keep in mind that although similar, the formula for getting it for hourly and salaried employees varies greatly.

The basic formula to get gross pay for salaried employees can look like this:

Annual salary / pay periods per year.

However, the formula changes when it comes to employees paid by the hour, like so:

(Hourly rate x hours worked) + (overtime rate x overtime hours) + bonuses + commissions + other earnings (tips)

Although employers can calculate the gross wage for every employee with the help of a compensation management solution, the formulas provided above can still be of great use in fringe cases like when a salaried employee suddenly works as an hourly employee.

What is the difference between gross pay and net pay?

The main difference between gross and net income is that gross pay is the amount of money an employee CAN earn, whereas net pay is the amount of money an employee WILL earn.

This means that gross pay is the total of an employee’s taxable income. Net pay, on the other hand, is the sum of money that an employee will receive after every deductible has been removed from their gross wages.

The deductions include mandatory Federal Income Tax deductions, health insurance premiums, Social Security, Medicare taxes, payroll taxes, and voluntary deductions that the employee made.

This means that to calculate net pay, all an employer has to do is to subtract all the aforementioned deductions with their gross pay.

Difference in gross pay regulations per US state

Different U.S. states also have different rules when it comes to gross pay. Listed below are the U.S. states with regulations, along with the rules that follow them.

• California

  In California, employers need to file an itemized wage statement for every employee. This includes an employee’s gross pay, hours worked (not required for salaried exempt employees), every deduction, and net wages.

• Colorado

  Colorado rules require employers to include everything in an employee’s gross pay. The list includes the following:

  • Salary

  • Hourly wage

  • Overtime

  • Tips

  • Bonuses

  • Commissions

  • Piece rate

  • Employer-provided leaves (PTO, sick leaves)

  • Disability benefits

  • Parental leave

  However, it should be noted that although Colorado rules may include everything, they do not include expense reimbursements and severance.

• Hawaii
  

  Hawaii follows the same gross pay regulation as every state in the U.S., but with some stipulations. For example, under the HRS, Wage and Hour Law, every Hawaiian employee is required to be paid by their employer for all hours that an employee has “suffered or permitted to work”.

  This means that an employer is required to pay their employee if they report for work at their scheduled time and was made to wait to work before being informed that no work is available at the time. Employers are then required to pay the employee at their regular rate of pay.

  This ensures that an employee in Hawaii can still earn their full monthly salary even if their employer does not provide work for them, but only if there isn’t any work for them to do.

• Maryland

  After the Pay Transparency Law has taken effect in the state as of October 2024, Maryland employers are legally required to provide their employees with either a physical or an online pay stub that shows their gross monthly income. Employers are also required to provide a written statement of their employee’s gross income as well.

• District of Colombia

  The only difference with District of Colombia has with other states is that employers there are legally required to pay their employees twice a month per the DC Wage Payment and Collection Law. Otherwise, the state shares similar regulations when it comes to other U.S. states.

How to get gross pay

The formula listed above can be used to calculate an employee’s gross pay, both for salaried and hourly employees.

For this instance, let us assume that we’re calculating the gross pay for a pharmacy operations manager for the salaried employee, and a manicurist’s gross wage for an hourly employee. Per Salary.com’s Real-Time Job Posting Salary Data Report, they make $170,700 in a year and $11 an hour, respectively.

For our first example, here is the calculation for a pharmacy operations manager’s gross pay.

1. Step 1. Get the employee’s annual salary

   Per Salary.com’s data, a pharmacy operations manager would earn $170,700 in a year.

2. Step 2. Identify how many pay periods the employee has in a year

   For this instance, let us assume that they get paid bi monthly in a span of a year, which would equal to 24 pay periods in a year.

3. Step 3. Divide the annual salary by pay period

   After identifying both, the calculation for a pharmacy operation manager would look similar to the figure below:

   

   $170,700 (annual salary) / 24 (number of pay periods) = $7,112.5

   Thus, we can assume that the median gross pay for a pharmacy operations manager in the U.S. is $7,112.5.

   Next, let us compute the gross wage for a manicurist in the U.S.

   In this situation, let us assume that the average manicurist earns $11 an hour, and they have worked the full 40 hours in a week, or 80 hours in two weeks, and they have worked an hour in overtime each day.

   Let us also assume that they take 35% of their hourly wage as commission, which would equal to $3.85. For this instance, let us also assume that they earn the same amount ($3.50) in tips.

   Thus, listed below is the computation on how to get gross pay for manicurists in the U.S.

   1. Acquire the employee’s hourly rate and multiply it by their hours worked: This means that the average manicurist in the U.S. would earn $880 in a bi weekly pay period.

   2. Multiply the overtime rate by the overtime hours: Since the manicurist worked an hour of overtime each day for two weeks straight, we can assume that they worked an extra 20 hours. And since the overtime rate is half of an employee’s regular salary, we can assume that their overtime rate is $5.5 an hour. Thus, this means that a manicurist that worked 20 hours of overtime will earn $110 in overtime pay in 2 weeks.

   3. Add the commissions and tips together: In this scenario, let us assume that they worked on 5 customers a day for the 2 weeks as well. This means that the manicurist will earn $35 in commissions, and $35 in tips.

   4. Add everything to get gross pay: Thus, the formula for a manicurist in the U.S. that is considered an hourly salary will look like the figure below:

   $880 (hourly rate x hours worked) + $110 (overtime rate x overtime hours) + $35 (Commissions) + $35 (tips) = $1,060

   This means that the gross pay for a manicurist in the U.S. is $1,060.

   Keep in mind, this process can be significantly streamlined as there are plenty of compensation analysis options available that can provide minimum wage data for every job in the U.S., ensuring an easier way to calculate gross income.