It's About Your Paycheck (Episode 2)

[00:00:00] Brian: Welcome back folks to it's about your paycheck. We're excited. There's a brand new show for us.

[00:00:07] Brian: And we're super excited to deliver man. How are you doing today? Well,

[00:00:10] Walt: doing good. Doing good. Excited. And like I said, it's an additional show. I think we're focused more on the employee. Yes. Again, we keep going back to that word empower the employee,

[00:00:24] Brian: right? Absolutely. And not only, the W2 employee, we will touch on some 1099 folks.

[00:00:32] Brian: We haven't yet. It'll come. It's 1099 is a little easier to digest and go. This might, just be one episode, but we're going to do the research. We're going to make, prepare for it and we'll make sure we cover 1099 folks as well. So if you're 1099, it's not only about your paycheck, it's about your invoice, right?

[00:00:49] Brian: And it's about your check. That you get from that. So we will, don't be afraid. Don't shy away from the show. We're going to cover some things for you

[00:00:56] Walt: whatever walk of life. This

[00:00:57] Brian: is for you. Oh, heck yeah. Heck yeah. Are you kidding me?

[00:01:02] Walt: To your point, to piggyback on what you said, anything that's concerning the employee 1099, no matter what type of employee you are this, is for you.

[00:01:11] Brian: That's right. Thank you. Perfect. So today we're gonna, it's a very we, want this to be in digestible nuggets. We're just gonna cover what is involved in calculating your gross pay. That big number. And I, what's the joke. Oh, what's gross is what I take home. And what's gross is the net we're going to cover take home pay on another show.

[00:01:37] Brian: Oh, we're just caught. We're just covering gross pay because just the basics, just fundamentals, let's start really, let's start at the beginning and we're going to end somewhere in 10 years from now at the end. So again,

[00:01:51] Brian: we're just gonna, here's the best way to calculate your earnings. And some helpful tips involved. I'll start us off with the first two and then you send with that last one. Okay. Go ahead. The first one is... really basic, right? Gross, calculation. But the complexity comes where if you're salaried employee or an hourly employee, an hourly means right, you're clocking in and clocking out and they pay you according to those hours, you're overtime eligible.

[00:02:22] Brian: And that's an hourly employee. Salaried employee you may still have to clock in and out. But your pay is not driven on your hours worked, it's predetermined, right? You usually get an offer letter in the beginning or some type of documentation of saying, Hey, here's what you, we're going to pay you for this job on an annual basis.

[00:02:46] Brian: And then you divide that number to get your salary, right? So those are the differences. It's an hourly rate, hourly wage or a salaried rate, which is usually based on annual and hourly. Both should be on your offer letter and then some documentation after from within your company. Did you want to say something?

[00:03:11] Walt: No, great call out on that. And just for the folks that are out there that may be salaried, non exempt. We'll cover that later on, we'll cover that later on down the road because there are some examples of that and there are fewer examples of that than normal salary exempt people, but we will cover that right so I just wanted to piggyback on that.

[00:03:32] Walt: And because Brian, knows that he just didn't mention it because this is a simplified explanation of what he's trying to say

[00:03:38] Brian: okay. Absolutely, So then to calculate your gross for the hourly workers. You simply get the hours you worked in any given pay period and you multiply it times your hourly rate, right?

[00:03:54] Brian: And though, so usually let's say it's two weeks or one week, so it's 40 hours or 80 hours times 25 an hour gives you your gross amount of pay for salaried folk. Again, it's based on that annual and you need to understand how many times you get paid in a year. And that's a simple question to your payroll folk.

[00:04:18] Brian: You will not get in trouble by asking. You, if you're starting a job, you ask right out the gate. Hey, what's the right? That's usually what you're going to ask. Anyway, if you start a job, like how many times do I get paid? Is it bi weekly? Is it seven months? Those are the two most common weekly and monthly doesn't really exist in the U S anymore, but it does exist in the UK.

[00:04:37] Brian: Okay. So in the U S we're really bi weekly, semi monthly. Some folks are weekly and in the UK monthly is also an added. Frequency, and you would take your annual and divide it by however many times you got paid. Sorry. Well, there you go. No, you're

[00:04:55] Walt: good. You're good. And just touch a little bit more on that.

[00:04:59] Walt: Daily pay is starting to come out there. So some of you may be

[00:05:02] Brian: doing wait a minute. What do you mean by daily pay? Meaning I can pull my wages daily or a daily rate.

[00:05:10] Walt: I don't mean daily rate. There's a

[00:05:12] Brian: differet I didn't mean daily rate, that's why I asked question. That's why I asked. Good question.

[00:05:15] Brian: Yep. So

[00:05:16] Walt: what I meant is that you're, you have access to your pay, right? If you, whether you're salaried hourly each and every day. So that means I can pay myself, so I can go through and there's systems that allow you to pay yourself after you can, after you clock out for the day, and you can get paid for that

[00:05:31] Brian: day.

[00:05:32] Brian: Yeah, so let's, circle back to that. Cause I think we can do a whole show on best practices for that because I don't know if everybody knows how how that's going to work and they think, oh, I can, cause there's they have to allow a certain amount of hours to pass before they can actually go get that access to that daily pay.

[00:05:55] Brian: And I'll drop another little thing and it's just a teaser because you guys are going to want to talk about this. The other teaser is you're borrowing against your end of the week pay. So there's a chance that you could actually eat up most of your pay before you get paid. So you got to keep those things.

[00:06:11] Brian: Those are the big, two big call outs, but there's more. So that's, a great idea for another show. I'm getting so excited folks. All right. And then the next ones are walt's. He's gonna walk us through some. Other things that impact this calculation, right? So again, I just covered. The hourly calc and the salary calc.

[00:06:31] Walt:

[00:06:31] Walt: So 1 of the other things to really consider is especially if you're hourly is overtime, right? It is for hourly employees. You must account for those hours worked because overtime hours are paid. At an increased rate, and typically that is time and a half. So when we say time and a half,

[00:06:52] Walt: 1. 5 times your hourly rate to now equal what you're what you get paid for your overtime for each hour that you work. That's over or each minute. Really? Because it's really not hours. This is good. Could be minutes that you get over 40 in a week,

[00:07:07] Brian: 40 or

[00:07:08] Walt: depending on your, where your location is, you might be in California.

[00:07:12] Walt: So it might be. Over 8 hours in a day or something like that. It could be different. So you want to know that right? And so for both hourly and salaried employees, you want to make sure that any performance based incentives or bonuses that may be paid to you. You want to look at that as well, because there's a difference between and we'll get into this later, right?

[00:07:35] Walt: There's a difference between a net to gross pay out a 500 dollar bonus. Are you know, I'm paying you a 500 gross bonus, right? Yes. So there's some understanding in that and we may touch on that later, but that's a little bit more complex. This is really to try to tell you how to calculate and understand what your gross pay is.

[00:07:59] Walt: One of the key things that Brian touched on. No matter if you're salaried or hourly, it is knowing your rate. That is essential. That helps you so much because think about it. If I'm under the impression that my rate is 12 an hour, but My rate in the system is 10 an hour, and that's not a lot. No, and I may not understand it.

[00:08:26] Walt: Hey, what's going on? I thought I was supposed to be at this rate and there may be something like, hey, I could be if I'm a 10 month employee, which happens to certain industries, right? Education, certain industries, my rate may be different. So there's different things that you have to consider.

[00:08:44] Walt: Educate yourself on and or reach out to a professional to help you understand how exactly your rate works, right? And how your hourly wage or your salary rate is calculated perfect segue and Brian touched on this a little bit earlier, but it's really a step on how to calculate your pay for hourly employees.

[00:09:05] Walt: Basically, what Brian said is to multiply your hourly wage by the number of hours worked in a pay period. This is just piggybacking on what Brian said earlier for salaried employees, divide your annual salary by the number of pay periods in a year. So that could be 12. if you get paid monthly, that's 12.

[00:09:26] Walt: if you get paid bi weekly, that's 26. if you get paid semi monthly or bi monthly, that's 24. So yeah, so it's good for you to not only understand what your rate or your wage is per hour or per pay. It's also good to understand how your pay period. Yes, it all factors in to calculating a correct gross for yourself.

[00:09:51] Walt: Yep. All right. So let's go to these extra tips that we have here. You want to start off with the

[00:09:58] Brian: first couple of them? Yeah, for sure. First one is keep in mind that your gross pay is not the same as your take home pay. I know. And that that's the joke I mentioned, Hey Oh, it was gross is what I take home.

[00:10:10] Brian: Yes, it is. It is gross. And we will talk about that in another episode on the things that come out of your check. So that it's not the same. We're just talking that first number. We have not taken anything away yet. We have not taken taxes away yet. We have not taken your health benefit deductions away yet.

[00:10:31] Brian: And that is how you get to your net pay. So we keep in mind gross is always different than net. And it should always be different than that. If you're a W 2 employee, if it's not, that's a red flag. Next one is Use, use an online pa Ooh, yeah, this is a good one. You, if you have trouble, if you're like, What are y'all talking about, man?

[00:10:54] Brian: Go Google. Paycheck calculator. And there's a ton of them. They're free. Usually a payroll place has them for you for free. Whatever. We'll find a good link for you too that we'll have eventually. We're, working on our own for y'all so that it's unbiased and you don't have to be like, ooh and, use it. And that the, net ones, that's a little tricky to get to a net pay from an online pay calculator because you really need your details. Yeah, you need the details, right? We'll tell you how to do that one too. When we talk about net pay, but for gross pay, you can use the pay calculator and where it says gross you punch in your hours, you punch in your rates or, whatever it have you and you get a gross and it's a, you can do it on a calculator too, folks.

[00:11:40] Brian: You can do it on a spreadsheet, you can do it on a calculator, but online payroll tools are really cool when it. When you're, when we're talking paycheck, because we can mimic where you can and you can get to a place where you're like, Oh, this is okay. I understand now. The, Oh, this next one I love. And I tell people all the time, my whole career.

[00:11:59] Brian: Always review your pay stub, AKA pay slip. For accuracy. I just, in episode one, we were just talking about how I had a, person hold on, I think, sorry, folks, it was a different episode. We do a bunch of shows but anywho, I was just talking about how, an employee, real life employee, and it always happens W2 time, right?

[00:12:27] Brian: We get our W2s and we're like, well, what's this? He paid to a different State for the whole year, he lived across the country, nowhere near this state, no possible confusion, right? For a whole year until he realized, oh crap I, didn't, I don't live there. You know what I mean? So we got a refund from it, but it takes time.

[00:12:49] Brian: He had to wait months for that refund because he didn't realize the error in real time. If you see an error the first time in your paycheck, believe me, that is the moment you fix it. That is the moment you and your payroll person will appreciate that, that you told them immediately like, Hey, this is wrong because the longer it drags on, the harder it is and the more complicated is for everyone involved.

[00:13:13] Brian: So What's a simple best practice. Look at your pay stubs. If you have questions and you don't know,

[00:13:23] Walt: Brian said in the first one, consult with your company's HR slash payroll department for assistance. Basically in layman's terms, check with the pros. Yeah, we,

[00:13:35] Brian: they'll let you know. I'll do one more and, yes, I'll do one more and then you, can take the rest.

[00:13:41] Brian: Yes, sir. Verify that all hours worked and additional payments are correctly reflected. Again, just check your pay stub. Did you work? All the hours that it says and maybe there was an additional payment like Walt mentioned earlier, there could be an incentive bonus or something extra that was there that whatever, reason is extra, it goes above and beyond your normal base pay.

[00:14:08] Brian: It's extra, make sure it's in there, right? And you're not. There should be complete transparency on your pay stub. If there's something that you don't understand, you should be able to comfortably safely call your payroll folk and say, Hey, what's this code that I got, I see and even if you, if it looks right, yep I, was supposed to get the 500, but I was supposed to get it for an education stipend, and this says bonus. Is that right? Call them out, because... Hey, guess what? You can get taxed at a different rate on a bonus than you do on an education, right? We'll talk about that in another show But there's two so there's different applications of things and it should be right.

[00:14:55] Brian: You want accurate reporting You want an accurate payslip like Walter said that payslip is it has to be at and that could be it the money's right the coding of it might not be and it could have A monetary impact on the check. There

[00:15:12] Walt: could be implications. Yeah,

[00:15:14] Brian: yeah. Great point. Alright, take us through the rest then.

[00:15:19] Walt: If your hourly wage or salary changes, adjust your calculations accordingly. So basically, If you just received the promotion or there was a general increase at your company, take that into consideration. Don't keep calculating your pay at the wrong rate. You could do yourself a disservice as well.

[00:15:39] Walt: Yeah, if something was submitted for you by your manager , and it wasn't processed for whatever reason, and you're just going through the flow and not checking anything like that, you could be missing out on some. Much deserved pay that is rightfully yours if you don't adjust the calculations, right?

[00:16:01] Walt: So that's something to really understand this next 1. it really doesn't impact gross pay. But it's still a good tip. Be mindful of any changes in your deductions or benefits that may impact your pay. That's a good 1. that's something probably for a later episode to think about. But it's on here.

[00:16:21] Walt: There are several payroll apps and online calculators available that can simplify the process to you. So this is piggybacking on what Brian said earlier, right? There are things that are out there. There are things that we have, or we're going to have. That are going to help you and assist you in calculating your pay.

[00:16:39] Walt: These tools can be a little bit difficult to use so if you need assistance with those, or accessing those, or understanding those again, ask the pros, ask your payroll department, ask your HR department. They are there to assist you and educate you and help you understand how you're pay.

[00:16:58] Walt: Works. Okay. , if you're unsure, please don't hesitate to reach out to someone, okay. Including

[00:17:04] Brian: this show. Yep. We can reach out to us as well. We were glad to help out. We, do not offer legal advice. Our advice is not legally binding. It is directionally correct. And it is for you to follow up with your Work your, professionals at your job, it will give you a little bit of information, make it dangerous, right?

[00:17:30] Brian: So you can go and ask the right questions because a lot of times it's just you don't know what question to ask. You know what I mean? My check looks wrong, but I don't know what I, how, where I even start and, I've gotten better at it over the years. Gosh, we've been doing it so long that now I'm just like, okay, well, tell me what's different, right?

[00:17:51] Brian: I know cause look this is the most intimate thing that we touch is their pay. And, all kind of emotions and this is our payroll is life, right? Pay is your life. So again, we want to give you the information you need. We want to arm you. We want to empower you with the right information to call up your payroll folk, call Walter on the other side and say, Hey, well I see this on my check.

[00:18:21] Brian: And this is the code that I'm seeing what's this that's a huge help now walk and zero right in and say oh you know what we just updated the codes it used to be this sorry we updated it to this to be more descriptive oh man that makes sense thank you and that's it you know and that's it so again reach out to the show we're here for you guys we you know you We love you.

[00:18:43] Brian: All these tips. Remember,

[00:18:45] Walt: if you need to listen to this again on repeat, listen back and also check out the show notes. There's going to be helpful things online on the site that are going to be helpful for you. You can review these things and stay tuned. This is for you. Again, this is about empowering.

[00:19:01] Walt: The employee, we're going to have tons of exciting things coming down the pipeline for you. You're going to have shows on, helping you potentially budget. We're going to have shows on helping you like navigate. If you want to use Excel, we'll have you. Well, maybe you have someone to help you with that.

[00:19:18] Walt: Like we're going to have so many things to help the employee. This is about you.

[00:19:23] Brian: The end. Yes. Thank you. Thank you. Well, you made me think I thought about so many things as we went through this oh, man, that'd be great for another show. It'd be great for another show because it does get complicated.

[00:19:34] Brian: And put it this way. We are going to be your first line defense, your first step in finance into financial wellness. Because where does it start? Oh, we're huge advocates of financial wellness. And where does it start with your paycheck? That's the first, that's the first place it starts, right?

[00:19:59] Walt: It starts with knowledge, really. Yeah. Yeah. It starts with knowledge, and then if you have an understanding, which is why we're doing this, and then if you apply that knowledge to your check,

[00:20:13] Brian: Yeah. So stay tuned. Tell a friend and tell a friend. Please, anybody just let 'em put 'em onto the show. Get better.

[00:20:22] Brian: We're gonna learn what's in your check. We're gonna learn the compliance, we're gonna learn legalities, all that good stuff. Tell, your cousin and them about it. Be up. Tell your mom and them. Tell your cousin and them tell, Junebug. Tell Tyler, tell tell Blake.

[00:20:43] Walt: Tell that cousin, that's in the armed service, thank you for your service by the way. Oh, heck yeah. In any industry, this is for you.

[00:20:50] Brian: Yes, this is for you. And by the way, folks, Walter actually processed payroll in the Navy on an aircraft carrier. So those of you who are veterans or in the service listening to this, we got you covered.

[00:21:04] Brian: Folks, family, we got you covered. We're talking. We got you. We got your veteran brothers here. I am a non veteran. So don't I did not go to, you know what I'm saying? We, are two halves of the same coin. We got it all covered for you. We have a, we have all kinds of influence in our, the pros, our network that we're going to pull in.

[00:21:24] Brian: Man, I got so many ideas as financial wellness, but I love the way we're not going to get too crazy, right? There's plenty of that out there. You want to invest it. Yeah. Go ahead. Go and invest. What we are gonna reiterate is that you should in fact invest in your skill. In yourself, in your in the finances, all that, and it starts right here.

[00:21:45] Brian: Paycheck and knowledge. How do I take, how do I leverage this? All that I'm gonna, we gotta cut it short. Listen to the next one. Get on there. Stop playing. We got it. We got you. We got y'all. Folks. Thank you for, joining us today and look out for the next show. Yeah. Look out. All right. Love you.