No one wants to be bogged down with payroll tax calculations. There are easier and better options. A paycheck estimator can help alleviate the pain. It can help estimate the calculations, deductions and filings.
If an employer or employee needs help with payroll calculations or estimating a net check amount, help is here. A paycheck estimator can estimate the amounts to be withheld from the employee for payroll taxes or any other deductions that may apply.
The term paycheck refers to the wages an employee earns from an employer. While, typically, an employer does not have the time to examine hundreds of lines of tax codes to find answers, they can get direction from through a paycheck estimator.
The estimator helps determine the amount of federal income, Social Security, and Medicare taxes to be withheld from an employee's paycheck, as outlined in the Internal Revenue Service's Employer's Tax Guide (Publication 15 Circular E). It also considers the amount of pre-tax 401(k) or 403(b) plan contributions that are made, as well as pre-tax flexible spending account contributions for health care and dependent care expenses before estimating the amount of taxes to withhold.
An employee's net income is determined by (1) gross wages, less (2) Federal Withholding taxes determined by the filing status on an employee’s W-4 Form, (3) State Income Taxes (if applicable), and (4) any other deductions as determined by the employee.
Most states require employers to withhold state income taxes, except for Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming, which have no state income tax. Additionally, New Hampshire and Tennessee don't tax wages. Certain cities, such as New York City and Philadelphia, impose local income taxes that can result in additional wage withholdings from employees' paychecks.
The estimator will also help figure an estimated net amount after all income deductions. An employee can even estimate what his or her paycheck might look like after a raise.
See our payroll calculators - www.surepayroll.com/resources/calculators
