Fundamentals of Payroll Calculations: Taxable Gross, Regular Rate of Pay and State Differences in Taxable Calculations

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    Speaker: Merle Capello

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    Duration: 60 Minutes
    Product Code: 50945
    Level: Intermediate

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In this webinar, attendees will learn the difference between gross pay and taxable pay and regular pay, all of which may be different numbers! This can prepare the payroll team to respond to questions from employees who don’t understand their paychecks. We’ll discuss these questions:

  • Do you know if any of your benefit plans are pre-tax?
  • If you are in multiple states, are you aware of how each state regards Section 125 or 401k plans?
  • What about an employer match for your 401k or 403b plan? Do your benefits include life insurance, and are you aware of how this may affect an employee’s taxable income?
  • Do you understand how to calculate taxable wages and what is also not subject to withholding?
  • If your employees are paid hourly, do you know how to calculate hourly rate from salary and if they receive the same hourly pay for all jobs, or are there shift differentials, multiple rates or other additions and changes to the employee’s base rate?

The webinar will discuss methods to ensure that all possibilities are included when calculating pay. If you use a vendor service or SAAS to process your payroll, we’ll also discuss how to verify that the vendor has encompassed all your variations in their calculations. It’s always better to be safe than sorry, so ensure that you can verify each employee’s pay-to-gross calculation and know how to calculate wages.


Ploughing through the many rules regarding taxable, non-taxable, and pre-tax deductions and earnings is challenging. We’ll help you calculate base to gross wages for multiple scenarios. This webinar will help you respond to the employee who can’t understand why his/her rate is $1,000 per pay period and the pay stub says, “Taxable Gross=$920.00”.

  • Do you pay hourly employees with separate hourly rates for different jobs?
  • Do you pay employees in a state that allows pre-tax deductions?
  • Or are you in a state that doesn’t allow pre-tax deductions?

This webinar can help you always pay these employees correctly. Even if you use a payroll vendor, always know how to calculate net pay from gross pay and how to calculate wages, in order to verify calculations are correct.


  • Taxable vs salary/hours
  • Blended rates
  • RROP (Regular Rate of Pay) calculation
  • Exclusions from taxable
  • State differences in taxable calculations
  • Additions to and subtractions from rate
  • Taxable items not subject to withholding


Attendees will learn the difference between gross pay, taxable wages and also determine what is taxable but not subject to withholding. Getting to gross is the first step; getting to taxable gross must follow. Attendees will also learn how to calculate wages for hourly paid employees.


  • Payroll Associate and Supervisors
  • Anyone who has responsibility for payroll customer service
  • Any payroll team that pays both hourly and salary paid employees
  • Benefits Associates
  • Payroll Consultants
  • Payroll Service Providers
  • Public Accountants
  • Internal Auditors
  • Tax Compliance Officers
  • Enrolled Agents
  • Employee Benefits Administrators
  • Officers and Managers with Payroll or Tax Compliance Oversight
  • Company/Business Owners
  • Managers/Supervisors
  • Public Agency Managers
  • Audit and Compliance Personnel /Risk Managers


Years of Experience: 25+ years

 Areas of Expertise: Development, Enhancement, and Transfer of Payroll and HRIS Operations

Merle Capello is an experienced CPP (Certified Payroll Professional) who can manage, train and elevate team members, enhancing their skills so that they can be leveraged to benefit clients.  Merle is a professional who works to improve processes, by additional knowledge and conforming to rules of compliance.  She is also an experienced procedure and policy developer who works to leave a better team behind than the one she finds.  Merle is a subject matter expert on compliance, payroll taxes, work rules and payroll best practices.  Merle offers consulting services for those who need a professional's advice and counsel.  In her more than 25 years of experience spearheading the development, enhancement, and transfer of payroll and HRIS operations, Merle has learned to provide team members with the guidance and motivation to exceed objectives.
Merle enjoys the challenge of implementation and organizational change, using her analytical skills and her knowledge base to make the most prudent decisions for the team and for her clients.  Merle can easily adapt to either running a department or advising a client on how best to run their department.  She can write step-by-step directions for processes, if needed, or coach a team member to do so.

Merle is also a long-time member of her professional organization, the American Payroll Association.  She has maintained her Certification for over 25 years.

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