How Do You Calculate Payroll For Exempt Employees?
Under the Fair Labor Standards Act, executive, administrative, professional and outside sales workers, as well as some computer employees, are exempt from minimum wage and overtime compensation. Exempt employees cannot be paid less than $455 per week on a salary basis, or $27.63 per hour on an hourly basis. Calculating payroll for exempt employees is different from figuring payroll for nonexempt employees. Pay exempt (salaried) employees a set wage each pay period. Generally, exempt employees’ wages stay the same each pay date. For instance, say the salaried employee’s salary per pay period is $2,000; if you are using payroll software, you need to enter his annual salary only once. The payroll system will figure his wage per pay period, automatically paying this amount each pay period. Still, during payroll processing always print pre-processing reports to ensure exempt wages are being generated correctly. Prorate exempt employees’ pay, if applicable. Typically, a salaried employee’s p
