What Are Gross Wages?
Gross wages, also known as gross pay, refer to the total amount of money an employee earns before any deductions are withheld. This includes any regular pay, overtime pay, bonuses, and commissions earned during a specific pay period, such as a week or a month. In simpler terms, it’s the total income earned before any taxes, benefits, or other fees are taken out by the employer.
How Do You Calculate Gross Wage Pay?
Calculating gross wage pay involves adding various components of an employee’s compensation. Start with the base salary, the agreed-upon amount for regular hours worked. Then, include any overtime pay, typically calculated at a higher hourly rate than the regular wage. Additionally, factor in bonuses, commissions, or any other forms of additional compensation specified in the employment contract.
For example, if an employee’s base salary is $2,000 per month, they worked 10 hours of overtime at $15 per hour and received a $500 bonus, the gross wage for that period would be $2,000 (base salary) + $150 (overtime pay) + $500 (bonus) = $2,650. This total represents the gross earnings before any deductions.
