Guide to Global Payroll Management GROSS EARNINGS Gross earnings are determined by adding together all the "money" paid to an employee. There are many different types of cash earnings paid to employees. For example: regular earnings overtime pay vacation pay cash allowances REGULAR EARNINGS Regular earnings is the term used for the money employees receive for performing their services. Regular earnings can be paid in several ways. Salaried employees are usually paid a yearly salary divided by the number of pay periods in the year. Hourly employees are paid an hourly rate for each hour worked. To arrive at the total regular earnings, you simply multiply the hours worked by the hourly rate. OVERTIME PAY Wages for hours worked in excess of the hours stipulated by employment/labour standards, company policy, or a collective agreement are considered overtime hours. These hours are usually paid at a special rate such as one and one-half times (1.5) the employee's regular hourly rate. The applicable rate is governed by each provincial employment/labour standards act. When paying overtime hours at time-and-one-half for salaried employees, it's necessary to convert the employee's regular pay period earnings to an hourly rate. This can be done by dividing the employee's regular pay by the normal hours worked in the pay period. Example: Assume an employee is paid a weekly salary of $600 and works (40) hours a week. To determine the employee's hourly rate, the regular pay is divided by the number of hours worked in the week. $600.00 ÷ 40 hours = $15.00 per hour To determine the employee's overtime hourly rate, the regular hourly rate is multiplied by the overtime rate. $ 15.00 11-20 x 1.5 = $22.50 per hour for overtime purposes © The Canadian Payroll Association/L'Association canadienne de la paie 2020