Payroll Tax Calculator

Payroll Tax Deduction Online Calculator (PDOC)

You can us this calculator to know about the net increment & changes made by the employer in your existing payroll. You can identify & compare the differences between your existing pay roll & projected pay roll by entering the value of your estimated pay roll & deductions in it. You can also measure the effect of net deductions in your pay roll.

What Are Payroll Deductions?

There are a lot of tools that can assist you run any kind of business. A payroll tax calculator is one of the most important tools that cannot be neglected straight away. It can help an employer to rapidly work out how much they have to hold back in terms of payroll taxes for every employee. As required by federal law, the payroll taxes should be withdrawn from an employee’s check. They assist to finance the government and various social security programs. In general, the taxes are a fraction of the employee’s paycheck. It is significant for the employer to stay on the top knowing the most up-to-date information about how much to charge, and where they can get the payroll tax calculator.
Also Read: How to Calculate Payroll Taxes?
A payroll calculator is amazingly not a thing that you have to pay for. A plenty of tax calculators are available online, and you have to take care that you are looking for the right one. A good payroll tax calculator not only helps to save time, but this can be one of the best choices you craft for your business. In this exceedingly competitive business atmosphere, all the businesses are required to put the correct priorities so as to attain productive results. A good option to a payroll division is to utilize an online payroll service. It assures accuracy in the calculation of payroll of employees, including fulfilling various regulations linked with payroll process. It can also handle payment of payroll taxes 2015 as governed by local and federal governments.

Payroll Tax Withholding Calculator

It’s mandatory for a rising business to allot more time on actions that can add more worth to it. By utilizing online payroll services, they will save much in the calculation of payroll in addition to filling and paying payroll taxes. In contrast to an internal payroll department, it is can be gainful to utilize online payroll services. Most of these services are available at cost-effective prices, thereby creating it reasonable for all the businesses. It promises ease of use, although preliminary online set-up seems to be vital. All the future payroll calculations are based on this service, and the service providers offer online support in setting up the payroll account.
It is not denied that manual calculations are likely to get some errors, and if you opt for an online payroll service provider, you can definitely get good results. Online payroll service providers also provide the facility to preview the payroll prior to getting approval. The accurate calculations followed by timely service assists in eradicating penalties associated with the payroll tax payments.
Online Payroll systems are constantly up-to-date, and they keep you conversant about any newest developments in taxing bylaws. There are so many advantages available at a nominal cost, and you can’t overlook such essential service for your business. You can confer with any of the trustworthy online payroll service providers, and if you are confident about their capability and skill, you can hire them and ease yourself from all the worries related to payroll.
An online payroll deduction calculator is a free service, and this is a very potent tool in terms of its application in different ways:-

Computation of Payroll State Tax Calculator

It can be annoying to file wrong tax amounts and then filing returns again. It will lead you to stay longer in order to get everything in a perfect manner. This can be unreasonably complex, and it may lead to countless issues afterward. Consequently, a payroll calculator will be able to outline precisely how much tax withholdings are expected in a year and whether you are paying the correct amount or not. You can get a better proposal regarding how to calculate payroll deductions required to be paid in a financial year.

Planning for Retirement

You might desire to map for a retirement savings plan, but it would be moderately difficult, in case you have failed to plan it suitably. You could even finish making a huge loss, if you are not aware of such deferrals. With the help of an online payroll calculator, you can get an estimate of the whole year’s significance of deferrals. This can help to figure out figure out how much exact income you can expect to making in a particular year.

Combination of Various Sources

People who are earning income from various sources are sometimes fortunate to have additional benefits credited to their account. For this purpose, it is significant to utilize the payroll calculator in order to determine the precise amount of money made and how much taxes are required to be paid. This is an important thing to bear in mind, as it will generate a good proposal about the costs incurred in addition to the total income made. As a result, you are less prone to create any mistakes and will also be able to establish how much you generate and how muchyou are paying out.

Duty of the employer

It’s the duty of the employer to withhold or deduct taxes from the wages of the employee. It has to be paid to the government as per the required rules and regulations. The deducted taxes are maintained in a separate account, and it is paid to the government at the conclusion of the financial year.
Taxes that are to be deducted from the payroll of the employee:

FICA Taxes

FICA tax is a fixed percentage of the income, and is consistent for all employees. These include social security and medicare taxes, and are deducted at the prescribed percentage for both social security and medicare. Since, it’s the similar for all the employees; this is the easiest calculation of tax. Medicare is the type of insurance policy covering elderly people, above 65 years of age. It is somewhat expensive that actual income taxes.

Federal Taxes

The Federal Tax calculations are somewhat intricate, as it depends on a number of factors like the total gross income, marital status, and number of dependents.

State Taxes

State taxes in the form of payroll taxes include the deduction towards the taxes imposed by the state governments. The deduction rates fluctuate from state to state and may include city or county taxes. However, these taxes will depend on your business and the state where it is situated.

Payroll Tax Obligations

Every business with employees is required to deduct payroll tax from wages and to pay all the compulsory state, federal or local taxes. Default, if any, may result in heavy penalties and accordingly, it is necessary that payroll taxes are calculated and paid in time. In small businesses, the owners are required to pay anticipated taxes on self employment every quarter.
A business owner should consider the following steps when calculating payroll taxes:
1. Find out taxable workers
2. Find out taxable wages
3. Determine and calculate withholding amounts
In a business, the workers may be self-determining contractors or employees. The workers are regarded as employees if they have the right to manage and control the working procedure. Employees are regarded as taxable workers in relation to payroll taxes. On the contrary, self-determining contractors are accountable for their individual taxes. Payroll tax computations are complex, and it is suggested that payments be done in time to stay away from penalties or late fees.
The imperative feature of payroll tax is that it entails the employer to make a payment. If a percentage of an employee’s earning is withdrawn for social security, the same has to be paid by the employer in relation to the payroll tax. In other words, the self-employed people will have to put up with the burden of the total tax. These taxes are determined, calculated and withhold in accordance with the State and Federal tax arrangements.

Method of Payroll Tax Calculation

The payroll taxes are deducted from the salary of the employees. The deducted amount is retained in a separate account with the employer. Subsequently, it is paid to the government at the conclusion of the financial year. The deduction rates of the tax will depend on the state where the business is located. Calculation of Payroll taxes and its subsequent payment is the business owner’s obligation to the IRS (Internal Revenue Service). Its deduction is compulsory for all employers, and any evasion of default in the same will attract legal penalties and fine. A single mistake in the determination and calculation of payroll tax will attract a penalty. It is vital to be precise in payroll tax calculation, both in the interest of your employees and your business.
The method of Payroll tax calculation depends on the identification of the variations in the revenue code governing these taxes and personal income tax. The payroll services tender the alternative of filing federal and state payroll taxes for your business. A complete understanding of the Payroll tax is imperative for those having the decisive liability for fulfilling tax commitment.
Filing status
This field tells about the income tax return file status.
Gross pay
This is your annual gross pay before any deductions.
Number of allowances
You can claim allowances to reduce the Federal Income Tax Withholding after the determination of total withholdings. This reduction depends on the numbers of your dependents & itemized deductions.

401(k)/403(b) plan withholding

The rate of your gross income you contribute into a tax-deferral retirement plan like 401(k) or 403(b) plan. The increasing contribution to these accounts will minimize your Federal income tax withholdings. Your contribution to 401(k) or 403(b) plan could be 0% to 80% of your income. [401k Calculator403(b) Savings Calculator]

Employee paid health insuranceHealth Insurance Premiums are deducted from your salary. Make sure that you are not incorporating your employer’s direct payment.State and local taxesThis is the rate of State and local taxes which is deducted from your gross pay. You should talk to your Tax Consultant to know about the current year’s State and local tax rate. Withholdings related to your State and local taxes can only be estimated by this tax withholding calculator.

Other pre-tax deductions

This is about any deductions from your pre-tax income. FICA & Medicare require this taxable amount.Post-tax deductionsIf there are any deductions made by your employer from after tax income, you can enter this amount in this field.Post-tax reimbursementsIf there is any after tax repayment from your employer, specify it here.Year-to-date earnings. Generally your current years gross earnings excluding any income from other sources are the subject to FICA Taxes. These earnings are used to compute the amount of tax withheld for this year.Social Security taxRate of social security tax on your gross income.Medicare taxUsually Medicare tax is 1.45% of your gross salary income. There may be some provision for additional Medicare tax rate every year. You should consult with your Tax Consultant to be updated about the Medicare Rate.