Money & Pay Terms, Explained Simply
No jargon — just clear definitions for the terms you'll run into while using our calculators.
Every calculator here explains its own formula, but a handful of terms come up again and again. Here's what each one means in plain language, and which calculator it shows up in.
Pay and work
- Gross pay
- The total amount you earn before any taxes or deductions are taken out. Used in: Hourly to Salary Calculator, Hours Worked Calculator, Overtime Pay Calculator.
- Net pay
- What's actually paid out after taxes and deductions come out of your gross pay. This site's pay calculators show gross figures — net pay depends on tax withholding and deductions we don't calculate. Used in: Hourly to Salary Calculator, Hours Worked Calculator.
- Overtime
- Hours worked beyond a standard threshold — most commonly 40 hours in a week in the US — that are typically paid at a higher rate. Used in: Overtime Pay Calculator, Hours Worked Calculator.
- Time and a half
- A pay rate equal to 1.5× a worker's regular hourly rate, and the most common overtime multiplier in the US. Used in: Overtime Pay Calculator.
- Double time
- A pay rate equal to 2× a worker's regular hourly rate, sometimes applied for holidays or a second overtime threshold, depending on employer policy or state law. Used in: Overtime Pay Calculator.
- Effective hourly rate
- What you actually earn per hour once non-billable time, expenses, and overhead are spread across a target income — usually lower than the rate you bill. Used in: Freelance Hourly Rate Calculator.
- Billable hours
- Hours of work you can charge directly to a client, as opposed to time spent on admin, marketing, or other non-billable tasks. Used in: Freelance Hourly Rate Calculator.
- Cost-of-living adjustment (COLA)
- A pay increase meant to keep up with inflation, usually applied as a percentage rather than a flat amount. Used in: Raise / Percentage Increase Calculator.
Interest and fees
- Principal
- The original amount of money before any interest is added — the starting balance an interest or fee calculation is based on. Used in: Simple Interest / Late Fee Calculator.
- Simple interest
- Interest calculated only on the principal, not on interest that has already accrued. Compound interest, which this site doesn't calculate, adds interest on top of interest. Used in: Simple Interest / Late Fee Calculator.
- Late fee
- A charge added when a payment isn't made by its due date — often a flat amount or a percentage of the overdue balance. Used in: Simple Interest / Late Fee Calculator.
Prices and spending
- Markup
- The amount added to a product's cost to set its selling price, usually expressed as a percentage of the cost. Used in: Discount & Markup Calculator.
- Margin
- The percentage of the selling price that is profit. It's easy to confuse with markup because the two measure the same profit against different bases — cost for markup, selling price for margin. Used in: Discount & Markup Calculator.
- Discount
- A reduction from a listed price, expressed as a percentage or a flat amount taken off. Used in: Discount & Markup Calculator.
- Reverse sales tax
- Working backward from a total price that already includes tax to find the pre-tax price and the tax amount separately. Used in: Sales Tax Calculator.