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Federal and state tax withholdings are the amounts taken out of your paycheck to cover your tax obligations. The federal withholding is based on your Form W-4 information, and state withholdings va...
Read moreTo accurately calculate your paycheck, gather the following information. First, your gross pay or salary—this is your total earnings before any deductions, found on your offer letter or pay stub. S...
Read moreFICA taxes fund Social Security and Medicare programs. Social Security tax is 6.2% of your earnings, and Medicare tax is 1.45%, totaling 7.65% of your gross income.
Read moreYour W-4 form directly controls how much federal income tax your employer withholds from each paycheck, significantly impacting your net pay. The 2020+ W-4 redesign uses a five-step process instead...
Read morePre-tax deductions reduce your taxable income, which can lower your overall tax bill. Contributions to a 401k or HSA are made before taxes are applied, meaning you save money on taxes while also sa...
Read moreFederal and state tax withholding are two separate taxes that fund different government levels and use different calculation methods. Federal income tax is withheld by all U.S. employers regardless...
Read morePost-tax deductions are taken from your earnings after taxes have been applied. These can include Roth 401k contributions or wage garnishments, and they do not reduce your taxable income like pre-t...
Read moreBonuses and overtime increase your gross pay but are often taxed differently than regular wages, which can create confusion about your net pay. Overtime pay (typically 1.5x your regular hourly rate...
Read moreYou can increase your take-home pay by adjusting your tax withholdings on your W-4 form, contributing to pre-tax retirement accounts like a 401k, or increasing your health insurance premiums if off...
Read moreYour actual paycheck may differ from calculator estimates for several reasons. First, paycheck calculators use standardized tax tables and formulas, but your employer's payroll system may use sligh...
Read moreYou should recalculate your expected paycheck whenever significant changes occur to ensure accurate budgeting and tax planning. Mandatory times to recalculate include: when you receive a raise or p...
Read moreEmployer payroll calculations are a critical component of a company's budget because they include not only employee salaries but also additional costs such as payroll taxes, benefits, and insurance...
Read moreEmployer payroll taxes are mandatory contributions that employers must pay on top of employee wages. The main components are: (1) Social Security tax - employers match the 6.2% that employees pay, ...
Read moreEmployers are responsible for several tax payments, with FICA (Federal Insurance Contributions Act) being a primary component. As of 2025, employers must match the employee's contribution to Social...
Read moreGross payroll is the total amount employees earn before any deductions - this includes salaries, hourly wages, bonuses, and commissions. It's what you promise to pay employees. Net payroll is what ...
Read moreSalary and hourly employees are compensated differently, which affects payroll calculations. Salaried employees receive a fixed annual amount, distributed equally across pay periods, regardless of ...
Read moreEmployers have several mandatory tax obligations: (1) FICA matching - you must match employee contributions at 7.65% (6.2% Social Security + 1.45% Medicare) on all wages. There's no opt-out. (2) Fe...
Read moreOvertime pay is required for non-exempt employees who work over 40 hours in a workweek, at a rate of one and a half times their regular pay. This rule is mandated by the Fair Labor Standards Act (F...
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