Salary Non-Exempt Employees: Calculating Gross Pay in Patriot Software

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Salary Non-Exempt Employees: Calculating Gross Pay in Patriot Software

While salary non-exempt employees are paid a flat salary, they are not exempt under the Fair Labor Standards Act from minimum wage, overtime, and timekeeping rules.

For salary non-exempt employees, enter a flat salary rate in their pay rate field.  Patriot Software will calculate a regular hourly rate to determine the overtime rate that must be paid if the employee works over 40 hours in a work week.  Calculate the regular hourly rate by taking the employee’s annual salary and dividing by 2,080 hours.

If the employee works less than 40 hours in a week, the system will not prorate (decrease) the salary, and instead calculate the regular hourly rate as if they worked 40 hours in a week.

Here are three examples:

Joe is a salary non-exempt employee. His biweekly salary is $2,000.00.  The hourly rate to calculate his overtime is $25.00 ($2,000 x 26 pays per year / 2,080 hours).

EXAMPLE 1:  Joe works 80 hours in a biweekly pay period with no overtime. Joe’s regular hourly rate is:
$25.00 x 80 regular hours = $2,000.00 gross pay.

EXAMPLE 2: Joe works 75 hours in a biweekly pay period with no overtime. His regular hourly rate is:
$25.00 x 80 regular hours (even though he only worked 75 hours) = $2,000.00 gross pay.

EXAMPLE 3: Joe works 82 hours in a biweekly pay period, which includes 2 hours of overtime.
His regular hourly rate is: $25.00 x 80 regular hours = $2000.00.
His overtime rate is $37.50 x 2 overtime hours = $75.00.
Total gross pay: $2,075.00

If you choose to decrease the salary rate for a salary non-exempt employee for a pay period because the employee did not work their full schedule, you must first change their pay rate to the lower rate before processing their payroll.

Note the hourly rate calculated for salary non-exempt employee will appear as rounded to two decimals, when in fact the actual rate is not rounded.

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