How to Calculate the 'Gross Salary' for Each Employee By Using a Formula (2024)

By Angela M. Wheeland Updated March 11, 2019

Using formulas in Microsoft Excel is a reliable method to calculate payroll for your business. Microsoft Excel contains over 300 built-in formulas to aid in the production of a functional worksheet. The "IF" function is a logical test that assess whether a certain condition is met and returns a value according to the conditions. Using the "IF" function in your worksheet, you can evaluate an employee's hours, determine the number of overtime hours and calculate the employee's gross salary.

1. Open a Microsoft Excel Spreadsheet

2. Open a Microsoft Excel spreadsheet.

3. Enter Employee Names

4. Click cell "A1" and type "Employee." Press the "Enter" key. Click cell "A2" and type the name of the first employee. Continue entering each employee's name in column A.

   See Also

   Basic Salary: How to Calculate Basic Salary, Factors, Different Components & RulesHow to Process PayrollWhat is Cost to Company? | peopleHumBase Salary

5. Enter Employee ID Numbers

6. Click cell "B1" and type "Employee ID." Press "Enter." Click cell "B2" and type the employee ID of the first employee. Continue entering each employee's ID in column B.

7. Enter Employee Hourly Rates

8. Click cell "C1" and type "Hourly Rate." Press the "Enter" key. Click cell "C2" and type the hourly rate of the first employee. Continue entering each employee's hourly rate in column B.

9. Enter Employee Total Hours

10. Click cell "D1" and type "Total Hours." Press the "Enter" key. Click cell "D2" and type the total hours of the first employee. Continue entering each employee's total hours in column C.

11. Display Employee Regular Hours

12. Click cell "E1" and type "Regular Hours." Press the "Enter" key. Click cell "E2" and type "=IF(D2>40,40,D2)." Press the "Enter" key. This formula instructs Excel to display only the employee's regular hours.

13. Copy the Formula for Each Employee

14. Click cell "E2" and place your mouse at the lower-right corner of the cell. Your mouse pointer changes to a "+" sign. Click the corner of cell "E2" and drag your mouse to copy the formula for each employee.

15. Multiply Regular Hours by Hourly Rate

16. Click cell "F1" and type "Regular Salary." Press "Enter." Click cell "F2" and type "=E2*C2" in the cell. Press the "Enter" key. This formula multiplies the employee's regular hours by his hourly rate.

    See Also

    Salary Slip for 30000 per Month in Excel & PDF (with Breakup)

17. Copy the Formula for Each Employee

18. Click cell "F2" and place your mouse at the lower-right corner of the cell. Your mouse pointer changes to a "+" sign. Click the corner of cell "F2" and drag your mouse to copy the formula for each employee.

19. Display Hours Over 40

20. Click cell "G1" and type "Overtime Hours." Press "Enter." Click cell "G2" and type " =IF(D2>40,D2-40,"0")" in the cell. Press the "Enter" key. This formula evaluates the employee's total hours and displays only hours over 40. If the employee has less than 40 hours, the cell displays a "0."

21. Copy the Formula for Each Employee

22. Click cell "G2" and place your mouse at the lower-right corner of the cell. Your mouse pointer changes to a "+" sign. Click the corner of cell "G2" and drag your mouse to copy the formula for each employee.

23. Multiply Overtime Hours by Overtime Rate

24. Click cell "H1" and type "Overtime Salary." Press the "Enter" key. Click cell "H2" and type "=(C2_1.5)_G2" in the cell. Press "Enter." This formula multiplies the employee's overtime hours by the general overtime rate of time and a half.

25. Copy the Formula for Each Employee

26. Click cell "H2" and place your mouse at the lower-right corner of the cell. Your mouse pointer changes to a "+" sign. Click the corner of cell "H2" and drag your mouse to copy the formula for each employee.

27. Add Regular Salary and Overtime

28. Click cell "I1" and type "Gross Salary." Press "Enter." Click cell "I1" and type " =H2+F2" in the cell. Press the "Enter" key. This formula adds the employee's regular salary and any overtime.

29. Copy the Formula for Each Employee

30. Click cell "I2" and place your mouse at the lower-right corner of the cell. Your mouse pointer changes to a "+" sign. Click the corner of cell "I2" and drag your mouse to copy the formula for each employee.

31. Format the Cells to Dollars

32. Click cell "C2" and drag your mouse to highlight each employee's hourly rate. Click the "Home" tab and click the "$" sign in the "Number" group to format the cells to include a dollar sign and increase the number to two decimal places. Apply this format to the dollar amounts in column "F," "H" and "I."

33. Apply Formatting to Cells

34. Click cell "A1" and drag your mouse to cell "I1." Click the "Home" tab and click the "B" sign in the "Font" group to apply bold formatting to the cells.

Tip

If an employee is a salary employee and does not have an hourly rate nor receives overtime for hours worked over 40, type the employee's salary amount in column "F."