Nine states don’t tax employees and employers on earned income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. This does not include bonuses.
What states have local taxes?
There are 15 states with municipalities, counties, school districts, or special districts that impose local income taxes: Alabama, Maryland, Ohio, Colorado, Michigan, Oregon, Delaware, Missouri, Pennsylvania, Indiana, New Jersey, Washington, Kentucky, New York, and West Virginia.
There are 3 different methods used to calculate local taxes, it depends on the jurisdiction.
Percentage of taxable wages: used by most
Flat tax (monthly or annual): used by Colorado and Pennsylvania Local Services Tax
Tax tables: used by the New York Localities
Most of these taxes are paid by the employee, but there are a few which are paid by the employer. This calculation process can be complex, but PaycheckCity’s payroll service can do it for you. Learn about PaycheckCity Payroll.
What is gross pay?
Gross pay amount is earnings before taxes and deductions are withheld by the employer. This calculator will take a gross pay and calculate the net pay, which is the employee’s take-home pay.
What is the gross pay method?
The gross pay method refers to whether the gross pay is an annual amount or a per period amount. The annual amount is your gross pay for the whole year. Per period amount is your gross pay every payday. For example, if your annual salary were $52,000 and you are paid weekly, your annual amount is $52,000, and your per period amount is $1,000.
If my paycheck has a bonus, is it taxed differently?
Congratulations on your bonus! Unfortunately yes, bonuses are taxed more. They are taxed with what’s called the supplemental wage rate. Use our Bonus Calculators to see the paycheck taxes on your bonus.
What is pay frequency?
Pay frequency refers to the frequency with which employers pay their employees. The pay frequency starts the entire payroll process and determines when you need to run payroll and withhold taxes.
How is pay frequency used to calculate payroll?
For salaried employees, the number of payrolls in a year is used to determine the gross paycheck amount. For example, let's look at a salaried employee who is paid $52,000 per year:
If this employee's pay frequency is weekly the calculation is: $52,000 / 52 payrolls = $1,000 gross pay
If this employee's pay frequency is semi-monthly the calculation is: $52,000 / 24 payrolls = $2,166.67 gross pay
What is the difference between bi-weekly and semi-monthly?
Bi-weekly is once every other week with 26 payrolls per year. Semi-monthly is twice per month with 24 payrolls per year.
What are my withholding requirements?
Employers and employees are subject to income tax withholding. There are federal and state withholding requirements. Find federal and state withholding requirements in our Payroll Resources.
If I live in Delaware but work in another state, how do I calculate my taxes?
Additional careful considerations are needed to calculate taxes in multi-state scenarios. Learn more about multi-state payroll, nexus and reciprocity in this Multi-state Payroll guide. To calculate multi-state payroll for your employees, try PaycheckCity Payroll for free.
What’s the difference between single and head of household?
Someone who qualifies as head of household may be taxed less on their income than if filing as single. This is because the tax brackets are wider meaning you can earn more but be taxed at a lower percentage. This status applies for people who aren’t married, but adhere to special rules. If you’ve paid for more than half the cost of your household (with a qualifying dependent), consider this status. Be sure to double check all the stipulations before selecting, however. Picking the wrong filing status could cost you time and money.
What was updated in the Federal W4 in 2020?
In 2020, the IRS updated the Federal W4 form that eliminated withholding allowances. The redesigned Form W4 makes it easier for your withholding to match your tax liability. Here’s how to answer the new questions:
Step 2: check the box if you have more than one job or you and your spouse both have jobs. This will increase withholding.
Step 3: enter an amount for dependents.The old W4 used to ask for the number of dependents. The new W4 asks for a dollar amount. Here’s how to calculate it: If your total income will be $200k or less ($400k if married) multiply the number of children under 17 by $2,000 and other dependents by $500. Add up the total.
Step 4a: extra income from outside of your job, such as dividends or interest, that usually don't have withholding taken out of them. By entering it here you will withhold for this extra income so you don't owe tax later when filing your tax return.
Step 4b: any additional withholding you want taken out. Any other estimated tax to withhold can be entered here. The more is withheld, the bigger your refund may be and you’ll avoid owing penalties.
If your W4 on file is in the old format (2019 or older), toggle "Use new Form W-4" to change the questions back to the previous form. Employees are currently not required to update it. However if you do need to update it for any reason, you must now use the new Form W-4.
What’s the difference between a deduction and withholding?
In addition to withholding federal and state taxes, part of your gross income might also have to contribute to deductions. These are known as “pre-tax deductions” and include contributions to retirement accounts and some health care costs. For example, when you look at your paycheck you might see an amount deducted for your company’s health insurance plan and for your 401k plan. Pre-tax deductions result in lower take-home, but also means less of your income is subject to tax. Some deductions are “post-tax”, like Roth 401(k), and are deducted after being taxed.
In our calculators, you can add deductions under “Voluntary Deductions” and select if it’s a fixed amount (pre-tax), a percentage of the gross-pay (pre-tax), or a percentage of the net pay (post-tax). For hourly calculators, you can also select a fixed amount per hour (pre-tax).
The calculators on this website are provided by Symmetry Software and are designed to provide general guidance and estimates. These calculators should not be relied upon for accuracy, such as to calculate exact taxes, payroll or other financial data. Neither these calculators nor the providers and affiliates thereof are providing tax or legal advice. You should refer to a professional adviser or accountant regarding any specific requirements or concerns.