What are wages and how are they calculated in the U.S.?

[rajivkumar]

I’m trying to understand how wages work in the U.S. — especially the difference between gross pay, net pay, and taxable income. How are wages calculated for hourly vs. salaried employees? Also, how do factors like overtime, bonuses, and deductions (like taxes or benefits) affect the final paycheck?

 

[Emly]

Wages are payments for work, usually based on hours worked × hourly rate. In the U.S., employers must meet at least the federal or state minimum wage, with deductions for taxes and benefits taken from gross pay.

 

[Lucky]

Wages are earnings paid to employees for work done. In the U.S., they’re calculated by multiplying hours worked by the hourly rate. Overtime, bonuses, benefits, and deductions like taxes or insurance also affect final take-home pay.

 

[Shane Warne]

Wages refer to the amount of money the employees are paid to work in the U.S. In the case of hourly workers, the pay is calculated as hours worked considering hourly rate and overtime (typically 1.5x rate) as a pay during the time exceeding 40 hours per week. Salaried workers receive a given amount at least in every pay period, irrespective of the number of hours worked. Gross pay refers to the before tax earnings. This is minus tax, benefits and contribution towards retirement to come up with net pay or the received amount. Taxable income is the amount of earnings eligible for federal and state taxes, which may be less than gross earnings as of pre-tax benefits such as health insurance benefits or 401(k) benefits.

 

[Lucas]

Wages are payments employees receive for work done. In the U.S., they’re usually calculated by multiplying hours worked by the hourly rate or dividing an annual salary by pay periods. Deductions for taxes and benefits are then subtracted to get net pay.