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No one would call payroll taxes the easiest part of paying employees, but the right tools can make the process a little less, shall we say, taxing. For instance, a paycheck calculator can calculate your employees' gross earnings, federal income tax withholding, Medicare and Social Security tax, and final take-home pay.
Get an accurate read on your salaried employees' withholding amounts and net pay using our free paycheck calculator below.
To deduct the right amount from an individual employee's gross pay, you need the information listed on your employee's W-4 sheet:
Plus, depending on your company's benefits, employees might elect to withhold money for HSA contributions, 401K retirement plans, or charitable donations. Make sure you have that info handy too.
Finally, some employees are eligible for exemptions from federal and state income taxes and FICA taxes (or Medicare and Social Security taxes). Very few employees qualify for these exemptions, so you probably won't have to worry about it. But if your employees do qualify, just enter yes when the calculator asks if your employees are exempt or not.
Next, make sure you have key salary information for the employee whose paycheck you're calculating:
Not all states require an income tax, and tax rates vary from state to state. If your employee works in a state that does impose an income tax, just choose the state from the drop-down menu and the calculator will fill in the tax details for you.
Some employees might ask you to withhold an additional amount in state income tax. If so, have that information on hand so you can deduct the right amount from your employee's gross pay.
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Employers are required to withhold the following taxes from their employees' paychecks:
As an employer, you withhold these taxes from your employees' wages each pay period and remit them to the IRS quarterly.
Take-home pay is an employee's net pay. In other words, it's the amount of money the employee takes home each pay period after the employer withholds taxes and other deductions from their gross wages.
To calculate an hourly employee's take-home pay for the pay period, use this free calculator for hourly wages.
With unlimited payroll runs and automatic tax filing, Gusto helps small-business owners worry less about payroll and put more time into growing their business.
If you need to calculate an employee's take-home pay in a jiffy, our paycheck calculator can help you out. But if you have more than one or two employees and are tired of running the same calculations over and over, payroll software can take the task off your hands—including filing taxes on your behalf.
Interested in payroll software but don't want to budget for it quite yet? Check out our list of the year's best free payroll software for small-business owners.
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