Free Salary Paycheck Calculator

Sending employees home with the right amount of money is one of your most important jobs as a business owner. It’s also your job to accurately remit taxes to the federal government, which means withholding the right amount of federal, state, and local income taxes from your employee’s paycheck. Our paycheck calculator below can help.

All salaried employees are required to submit IRS Form W-4 when they first start working for you. The form should give you all the information you need to withhold the right tax amount from your employee’s paycheck, including their:

• Filing status (single, married filing separately, married filing jointly, or head of household)
• Number of allowances (based on additional household income and number of dependents)
• Additional tax withholding information

Some employees are eligible for exemptions from federal income tax withholding or the FICA tax (a.k.a. Medicare and Social Security taxes). Most employees don’t qualify, but if yours do, check “yes” on the exemption section.

Not all states require an income tax, and tax rates vary from state to state. If your employee works in a state with an income tax, choose the state from the drop-down menu, and the calculator will fill in the tax details for you. If you have employees in multiple states, remember to select the state your employee works in, not the state where your business is primarily located.

Not every city requires small businesses and individuals to pay local taxes. If yours does, enter your city information after your state information to generate the right amount in local tax withholding.

Depending on your company's employee benefits, employees might elect to withhold money for HSA contributions, 401(k) retirement plans, or charitable donations. Some employers also let their employees make voluntary deductions, such as retirement savings contributions.

Once you’ve calculated your employee’s net wage, you need to make a clear record of the amount calculated and paid out. Most states require you to give employees pay stub access so they can see exactly how much they earned and how much was withheld. 

You should also keep accurate wage records for tax purposes, both in the event of an audit and so you have the right information on hand to remit your quarterly payroll taxes. 

We recommend a few different free payroll templates, which both record your employees’ wages and automatically generate pay stubs. If you have too many employees to track by hand (or if you simply want to offload some time-consuming paycheck tasks), payroll software can automatically calculate paychecks and even remit taxes on your behalf.

If you’re not ready to pay for payroll software, free payroll software can help process payroll. (You can even pair your free payroll software with free accounting software to minimize the amount of time you spend crunching numbers and manually entering financial data.)

Accurately calculating employee paychecks isn’t just crucial to keeping your business afloat. It’s also essential to your employees’ livelihoods and happiness, not to mention a key part to staying compliant with the IRS. Our paycheck calculators and payroll templates can help you meet all of these goals, and if you want someone else to wrangle your payroll in and outs so you can focus on running a business, payroll software is an option too.

Are you about to hire your first employee? Our quick and dirty guide to small-business payroll familiarizes you with payroll processes so your first payday goes as smoothly as possible.

An employee’s gross pay is the total amount they make before their employer makes any payroll deductions for taxes, company benefits, 401(k) plans, or any other entity. (This could include wage garnishment for a court-ordered child-support payment plan). The net pay, or take-home pay, is the amount of money an employee goes home with after an employer makes all paycheck deductions.

To calculate a salaried employee’s take-home pay, start with the gross amount they make each pay period. Then, use their IRS Form W-4 and a paycheck calculator (like the one on this page) to calculate the amount of money withheld from their paycheck for federal, state, and local taxes. You’ll also want to deduct any money the employee contributes to your company’s benefits programs, such as life insurance plans, 401(k)s, and health insurance.

Once you’ve correctly calculated all the deductions, you should be left with the right amount of net pay, or take-home pay.

Employers are required to withhold the following taxes from their employees' paychecks: 

• Federal income tax
• State income tax (if required by your state)
• Medicare tax
• Social Security tax

As an employer, you deduct these taxes from your employees' wages each pay period and remit them to the IRS quarterly. You also need to send employees their W-2 or 1099 forms at the end of the year, plus file your business’s end-of-year taxes.

Employers are legally required to match their employees’ contributions to Medicare and Social Security taxes, otherwise known as FICA taxes. Employers (but not employees) also need to pay FUTA taxes, which contribute to the federal uninsurance employment fund. Sometimes, you’ll see FICA and FUTA taxes referred to collectively as the payroll tax (or payroll taxes).

Note that even household employers, or individuals who employ nannies, gardeners, or other household workers, must pay Medicare and Social Security taxes. Our paycheck calculator doesn’t calculate employer-specific payroll taxes.

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