Hourly vs. Salary Pay Stubs

Hourly and salary stubs carry the same taxes and the same net-pay arithmetic. What differs is how gross pay is built and what the stub has to show to prove it. That matters for state wage statement laws, for overtime, and for the way lenders turn a stub into monthly income.

What changes on the stub

	Hourly	Salaried, non-exempt	Salaried, exempt
Gross pay built from	Rate × hours	Salary per period, plus overtime	Salary per period
Hours shown	Yes, regular and overtime	Yes, in states like New York and California	Often not required
Overtime line	When hours exceed 40 in a workweek	When hours exceed 40 in a workweek	No federal overtime
Rates shown	Each hourly rate, e.g. $24.00 and $36.00 OT	Regular rate and overtime rate	Salary amount
Changes period to period	Usually	When overtime is worked	Rarely

The column that surprises people is the middle one. Salary isn't the same as exempt. A salaried employee who doesn't meet a federal (and state) exemption is owed overtime, and the stub should show it.

What the law asks each stub to show

Federal law requires employers to keep records of hours and wages, but doesn't require a stub. State law fills the gap:

• California requires total hours worked on the itemized statement, except for employees paid solely by salary who are exempt from overtime. For everyone else it requires all applicable hourly rates and the hours worked at each rate. See the California guide.
• New York requires the rate or rates of pay and their basis (hour, shift, day, week, salary, piece, commission) for everyone. For every employee not exempt from overtime, it also requires the regular and overtime rates and the regular and overtime hours. See the New York guide.
• Texas law, which applies only to employers outside federal FLSA coverage, requires hours worked when pay is computed by the hour. See the Texas guide.

Worked example: the same week, three ways

All three employees work 46 hours in one week in 2026, are single with a standard W-4, and live in a state without income tax.

1. Hourly at $24.00

Line	Amount
Regular, 40 × $24.00	$960.00
Overtime, 6 × $36.00	$216.00
Gross	$1,176.00

2. Salaried non-exempt: $960 a week intended to cover 40 hours. Under the federal regular-rate rule, the regular rate is $960 ÷ 40 = $24.00, and the 6 overtime hours are paid at $36.00:

Line	Amount
Salary	$960.00
Overtime, 6 × $36.00	$216.00
Gross	$1,176.00

Same gross as the hourly worker. Paid weekly, both have $99.20 federal tax, $72.91 Social Security and $17.05 Medicare withheld, for $986.84 net.

3. Salaried exempt: $49,920 a year paid weekly

Line	Amount
Salary	$960.00
Gross	$960.00

No overtime line, whatever the hours. Net is $813.28 after $73.28 federal tax, $59.52 Social Security and $13.92 Medicare.

The regular rate depends on the hours the salary is meant to cover. If the same $960 were intended to cover 35 hours, the regular rate would be $960 ÷ 35, about $27.43, and overtime after 40 hours would be paid at 1.5 times that. That's why a pay agreement for salaried non-exempt staff should state the hours the salary covers.

How lenders turn each stub into income

Mortgage lenders don't read hourly and salary stubs the same way. Fannie Mae's guidance is a good reference point:

Pay type	How monthly income is figured	History needed
Fixed salary	Biweekly gross × 26 ÷ 12: $2,400 biweekly = $5,200 a month	No minimum history for base pay
Hourly, fixed hours	Rate × average weekly hours × 52 ÷ 12	No minimum for fixed base pay
Hourly, varying hours	Average of YTD and prior-year earnings, or average hours × current rate	12 months
Overtime	Averaged over at least 12 months; trend must be stable or rising	24 months recommended, 12 may be acceptable

So an hourly stub with heavy overtime doesn't automatically raise qualifying income. Lenders want to see that the overtime has lasted. YTD figures, and the W-2s behind them, carry the weight. See pay stubs for loan applications.

Making either kind with us

Pick hourly in our generator when gross is rate × hours. You enter hours for each pay period, and overtime lines appear when they apply. Pick salary for a fixed period amount. For salaried non-exempt employees, include the overtime hours and rate so the stub reflects what was paid. Either way, federal, Social Security and Medicare withholding follow the same 2025 and 2026 IRS rules, and the free preview shows every line before you pay.

How often pay arrives changes the per-check numbers but not the yearly total. See weekly vs. biweekly vs. semimonthly.