FLSA 29 U.S.C. § 207
Authoritative Statutory Source
Gross Pay
Total compensation earned by an employee before any tax withholding or voluntary deductions.
Detailed Definition & Statutory Context
Gross Pay is governed by FLSA 29 U.S.C. § 207 standards across corporate payroll administration, statutory tax withholding, and general ledger labor accounting. Rigorous compliance with Gross Pay prevents IRS Form 941 deposit penalties and FLSA wage-and-hour litigation.
Statutory Formula & Equation
Gross Pay = Base Salary + Hourly Wages + Overtime + Bonuses + Commissions
General Ledger / Payroll Journal Entry Standard
Debit: Gross Payroll Expense / Employer Tax Expense
Credit: FICA Taxes Payable / Federal Income Tax Payable / Net Pay Cash
Credit: FICA Taxes Payable / Federal Income Tax Payable / Net Pay Cash
Common Operational Pitfalls
- Excluding non-discretionary bonuses from FLSA overtime regular-rate calculations.
- Failing to cap Social Security tax withholding once employee earnings exceed the $168,600 wage base.
- Misclassifying non-exempt hourly employees as exempt salaried workers.