Calculating Payroll Expense Blog + Payroll Exp Calculator Excel Doc.

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  • date February 13, 2024
Calculating Payroll Expense Blog + Payroll Exp Calculator Excel Doc.

Calculating payroll expenses for employees in Upstate New York involves several factors, including the number of employees, their salaries or wages, any additional compensation (like bonuses or overtime), and the cost of benefits such as health insurance and retirement contributions. Here’s a basic formula to calculate payroll expenses:
Total Payroll Expense = (Total Number of Employees) x (Average Annual Salary per Employee) + (Total Bonuses and Overtime) + (Total Benefits Cost)

Let’s break down these components:

  1. Total Number of Employees: Count all the employees on your payroll, including full-time, part-time, and temporary workers.
  2. Average Annual Salary per Employee: Calculate all employees’ average annual salary or wage. You’ll need to know each employee’s salary to do this.
  3. Total Bonuses and Overtime: Add up all the bonuses and overtime payments made to employees during the period you are calculating for. Make sure to differentiate between regular and overtime hours and apply the appropriate overtime pay rate.
  4. Total Benefits Cost: Include costs for benefits such as health insurance, retirement contributions (e.g., 401(k) matching), and any other employee benefits provided by the company. This can vary significantly depending on your company’s benefits package.

Once you have these figures, plug them into the formula to calculate your total payroll expense. Remember that this is a simplified calculation, and actual payroll expenses can vary due to factors like taxes, deductions, and changes in the workforce.
Also, be aware of any state-specific regulations or taxes in New York, as they can affect your payroll expenses. Upstate New York may have different tax rates or regulations compared to other areas in the state.

For precise calculations and compliance with tax laws, it’s advisable to use payroll software or consult with an accountant or payroll specialist who is familiar with the specific requirements for your location and business. We use Gusto for our payroll services, and we absolutely love it! Use our link for $100 off!

We have also created an excel document that you can use to estimate the total payroll expense associated with bringing on employees for the first time or just expanding your current workforce. This is meant to be used as an estimating tool and is not guaranteed to be accurate!

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