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.
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.
