Payroll Spreadsheet

Formulas, Functions, Logical Statements, and Lookups

 Calculating Pay

Gross Pay = Regular Pay + Over Time Pay

 Regular Pay

is the Hours Worked

less than or equal to 40
times hourly wage
 Regular Hours

This Uses Two Formulas…

If the hours worked are under 40,

then it’s Hours Worked Times the Wage

20 hours * $10 per hour = $200 that week

 Regular Hours

BUT…
If the hours worked are over 40,
then to calculate the regular wage
we take 40 times the hourly wage

(with Overtime calculated later..)

40 hours regular time * $10 wage = $400
So, how do we connect two formula
options?

We use an IF Statement

If the hours < 40, then hours * wage

else, 40 * wage
OR

If(hrs <40,hrs*wage,40*wage)
Now, in Excel

 =if(statement, if true, if false)

 Use the mouse to click on
the cell when building the
formula
 Base Work Hours was used,
rather than typing 40
 Use the F4 Key to lock down
the base work hours, so
when it’s copied, it doesn’t
shift
 Overtime Wage

Overtime Pay is the Hours worked over 40,

times the hourly wage,
multiplied by the Overtime Rate
Hours Worked – 40 * Wage * Overtime Rate

BUT, if there are not over 40, we don’t want to return

a negative number. 30 hrs – 40 = -10!
So we need another IF Statement

If the hours are under 40, then we’ll do nothing.

Otherwise we can run our formula for overtime.
So…
If (hrs < 40, then 0, (else hrs – 40) * wage * OT Rate)
Know why ( ) are there?

Order of Progression, otherwise the – happens last!

 Now in Excel…

 Use $ with BOTH the..

 Base Work Hours
(B21)
 Overtime Rate
(B22)
 The $ Lock down the
assumptions
 Use ( ) around the
base work hrs – hrs
worked.
 Remember:
P.E.M.D.A.S.!
 Gross Pay?

 The gross pay is the total of the regular pay and

overtime pay.

 So, add the regular pay with the overtime pay.

 Do not use any $, we want these to change when

copied.

So do this one quickly, and then we’ll tackle Taxable Pay

 Taxable Pay

 The taxable pay is the difference between the gross

pay and the product of the number of dependents
and deduction per dependent.

 The dependent deductible is $50 (cell B24), we then

multiply this versus their number of dependents, and
reduce the Gross Pay by this amount
Gross Pay – Deductible * Dependents
 Now in Excel…

 Use the Deduct

per Depend in B24
 Remember to use
the F4 key to lock
it down with $
 Federal Withholding Tax

 Federal withholding tax is calculated on the taxable

pay based on the tax table.

 This means we use the Taxable Pay, compare it to the

table at B21:E25, to find the Tax Rate.

 Then multiply this tax rate against their Taxable Pay

to find out how much tax to charge
 Lookup Statements

 Lookup statements are used to return information

from a table.
 The consist of 4 parts
 The lookup value – what we are looking up
 The Table Array – where are we looking
 The Column Number – which column has the answer
 Is the Lookup Value in the chart, or should it look for a
close one? True (Range) or False (Exact)
 Let’s build the vlookup

 It’s a Vlookup, as the table is Vertical. Otherwise it

would be a Hlookup.
 The Lookup Value is Taxable Pay
 The Table Array is D21:E25
 The Column is 2
 And Close is good enough, so True
 This should return for Abram 25%
It should look like this…
 But wait, there’s more!

 25% is not the answer, it’s just the tax rate

 We need to multiple this tax rate against the Taxable
Pay.
 Use F2 to Edit the formula, then add to the end * H5
Now in Excel…
 Now an easy one, FICA

 FICA is calculated on the employee's gross pay.

 FICA is just a flat percentage rate, found in B23.

 Use the $ to lock down this percentage rate in your

formula
 Let’s finish the line; Net Pay

 Net Pay is what you have after all the taxes are paid
 Take GROSS Pay, and reduce it by Federal
Withholding Tax AND FICA
 Ignore Taxable Pay
 Format, then Copy Down to
Complete

 Format all the formulas we just made in to

Accounting Number style
 Highlight E5 through K5, then copy it down with;
 Either the fill handle or,
 Copy/Paste to each row below
 If your bottom answer doesn’t look like this, Un Do
and go check you have the right cells locked down!
Calculate Totals, Average, Min/Max

 Use the Sum, Average, Min and Max formulas to

complete Row 17 and the table at I21:K24
 Format the values to match the formatting used in
the Payroll calculations
 Reduce any decimals to 2
The Completed Sheet