Free Hourly Paycheck CalculatorBoth the IRS and your employees count on you to deduct and remit the right amount of payroll taxes. Use this free hourly paycheck calculator to figure out how much that is.
Just hired your first employee? Congratulations! That’s a big step up in growing your business. It’s also a big step up in terms of your tax responsibilities: employers must deduct payroll taxes from their employees’ paychecks and remit them quarterly to the IRS.
Of course, no one expects you to know current tax rates off the top of your head. If you aren’t currently using payroll software and have just a few hourly employees, the free hourly paycheck calculator below can help you determine how much to withhold from each worker’s gross pay. And if you need a little help using it, scroll down to our helpful steps.
Step 1: Insert employee tax information
Using a paycheck calculator is pretty simple as long as you have the right info. Start with tax form W-4, or the Employee Withholding Certificate. New employees should submit a W-4 at the start of their employment that provides the following details:
- Tax filing status (married, single, or married but withholding at a higher single rate)
- Number of dependents
- Number of additional jobs (held by the employee or their spouse)
- Additional tax withholding requests
Since you’re using the hourly paycheck calculator, you also need your employee’s pay rate and hours worked this pay period.
Finally, your employees might opt into company benefits like 401K plans, HSAs, medical insurance, or charitable deductions that come out of their gross pay. If your company offers benefits like those, make sure to have the deduction amounts on hand.
Step 2: Insert exemptions and state tax info
Most employees should have the following payroll taxes deducted from their gross pay:
- Federal income tax
- State income tax
- Medicare tax
- Social Security tax
In some very rare cases, your employee might be exempt from income, Medicare, or Social Security taxes. If they are, check the tax exemption box on the calculator. Also, your state might not require an income tax. Even if it does, its tax rate is likely different from other states’ rates, so make sure you select the right state in the drop-down menu before calculating taxes.
Hourly paycheck FAQ
How do I calculate a salaried employee’s paycheck?
If you have salaried rather than hourly employees, use our salary paycheck calculator to determine your employee’s tax withholding amount.
What are FICA taxes?
FICA taxes include required Social Security and Medicare tax deductions from employee paychecks (FICA stands for the Federal Insurance Contributions Act). As an employer, you must match each employee’s FICA contributions—you’ll contribute the same amount your employee does every single paycheck.
How else can I calculate payroll taxes?
If you have too many employees to run payroll tax deductions by hand, self-service payroll software can automatically calculate taxes for you with each paycheck. If you want even more help, full-service payroll software will also withhold and remit taxes for you each quarter (though usually at a higher starting price than self-service software).
When should I outsource payroll services?
If you’re spending hours a week calculating payroll, then it’s time to change the way you do payroll. If you have over 100 employees, an outsourced payroll provider might be a good fit for you. These types of payroll providers calculate and file payroll taxes on your behalf. Some payroll providers called PEOs (professional employer organizations) can take on every aspect of your company’s HR, from payroll to hiring and firing.
A paycheck calculator is only as accurate as its user, so make sure to check, double-check, and triple-check your entered numbers before hitting calculate. But as long as you have the right, typo-free info, a paycheck calculator will tell you exactly how much to withhold from your hourly employee’s paycheck.
Want more thorough payroll help without a higher cost? See our list of the year’s best free payroll software—including some more complex pay calculators—for small businesses.
At Business.org, our research is meant to offer general product and service recommendations. We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.