If it’s time to pay your employees, you’re in the right place! Our free payroll tax calculator makes it simple to handle withholdings and deductions in any state. Employers can use it to calculate net pay, figure out how much to withhold, and know how much to include in employees’ paychecks.
Below our calculator, you’ll also find federal tax rates, state tax rates, and links to other employer tax calculators that you can use to check your work.
Have any questions about how to use this payroll calculator? We’ll go over the basics right here, but you can use our payroll processing guide to find definitions, tax forms, and detailed instructions for calculating payroll on your own.
To run payroll, you need to do seven things:
Figure out how much each employee earned
Calculate taxes you’ll need to withhold and additional taxes you’ll owe
Pay your employees by subtracting taxes (and any other deductions) from employees’ earned income
Remit taxes to state and federal authorities
File quarterly and year-end payroll tax forms
Give your employees and contractors W-2 and 1099 forms so they can do their taxes
The calculator above can help you with steps three and four, but it’s also a good idea to either double-check the calculator by using the payroll tax rates below, or save time and effort by using a reliable payroll service.
The steps our calculator uses to figure out each employee’s paycheck are pretty simple, but there are a lot of them. Here’s how it works, and what tax rates you’ll need to apply.
Figure out each employee’s gross wages. Gross wages are the total amount of money your employee earned during the current pay period. The math works a little differently for salaried employees, hourly employees and contractors.
Deduct any pre-tax withholdings. Payroll taxes aren’t the only thing to exclude from employees’ paychecks. Make sure to deduct for things like health and retirement benefits. The process for documenting and remitting these funds will vary depending on your benefits providers. Note that many services can be integrated with payroll software, which allows you to automate your deductions.
Deduct and match any FICA taxes: FICA, the Federal Insurance Contributions Act, is one of the many payroll acronyms you’ll soon get to know and love. It simply refers to the Medicare and Social Security taxes employees and employers have to pay:
In addition to federal taxes, employers must calculate and apply the appropriate state and local tax rates. The math works exactly the same, but the taxes levied by each state can vary dramatically. For example, seven states have no income tax at all. Others have state-specific equivalents of FICA and FUTA that employers will need to apply.
Choose your state below to find 2021 tax rates and other key information: