Paycheck Calculator or Salary Paycheck calculator is the tool used to calculate the take home salary per paycheck. The paycheck calculator provides complete salary information of the user. It helps in calculating both salary and hourly jobs by taking in to account of the federal and state, local taxes.
There are large number of websites and payroll agencies providing the Paycheck Calculators or Salary calculators to present the final data for the user. The calculator requires to key some information of the user to key in data i.e. State, job title, Period, Gross salary, taxes etc. to arrive at the final paycheck amount.
Employees, employers and payroll agencies, generally use paycheck calculators /Salary calculators to assess the salary offer or calculate their income after tax deductions by federal income tax and Local taxes.
Almost every state in the United States have difference in pay frequency for the employees as per the law. Each state established a minimum frequency referred as payday requirement. Some states set up payday laws either bimonthly where as some states are bi-weekly (every other week), but some states require monthly or weekly payment.
Illinois and California pays the employees bi monthly, for workers in Kansas to must be hand over paychecks once in a month. Paycheck frequency in Michigan is decided by the occupations.
What is a Paycheck?
A Paycheck is physical document issued by the employer to its employees for the services rendered for a specific period. Earlier it was in paper document form (a cheque) which is given physically to the employees with the attachment of other details. However, in recent times the electronic deposits to the employee bank accounts have replaced the physical cheques. Even for electronic transfers employees continue to get the detailed calculations of the final payment through Paystubs (Pay Slips) electronically.
Factors affecting the paychecks
The deductions play important role in the Paycheck tax calculator. It is mandatory to deduct Federal income tax and FICA tax withholding while calculating the Paychecks of the employees. There is no way to escape from these taxes unless your earnings for the period are low and you are exempt from certain taxes.
It is common that every country has its own payment frequencies to pay the employees. In United States some employees receive monthly paychecks (12 paychecks in a year), in other states, employer issue bimonthly paycheck on set dates (24 paychecks per year) and others pay bi-weekly (26 in a year). The frequency of the paychecks will affect the paycheck amount the get. The number of paycheck in a year will result in the lesser paycheck amount they get assuming the same salary.
Local Factors affect paycheck
In United State, each state has different tax laws. You can see the difference in each city or state you live you will see different paycheck amounts. Apart from the federal income tax, employer withhold part of amount from your paychecks for covering state and local taxes.
The Trump Tax Plan
The US president Donald Trump has introduced new tax plan in December 2017 in to law. The IRS has introduced new tax guidelines starting in the month of February 2018 and taxpayers have been educated by the amendments in their paychecks.
However, as per the change in tax plans the IRS has not revised the W-4 form. Employers advised to use the withholdings on the current form. The IRS is working on the W-4 form revision to be available for Employers and employees, so that in the future it will better reflect the changes to the tax code. Taxpayers need not fill up the W-4 form for the time being.
Single Fliers Married, Married,
Filing Jointly Filing Separately Head of Household
|$0 – $9,525||10.0%|
|$9,525 – $38,700||12.0%|
|$38,700 – $82,500||22.0%|
|$82,500 – $157,500||24.0%|
|$157,500 – $200,000||32.0%|
|$200,000 – $500,000||35.0%|
Withholding Taxes on Salary Pay
When a paycheck is released to an employee, the employer needs to withhold tax as per the legally required percentage decided by the government to pay as income tax. The Federal tax authorities collects withholding tax from employees throughout the year, by deducting directly from the monthly paychecks. The employer’s has to ensure to withhold this money based on the information provided by the employee in W-4 Form.
Certain section of people are exempt from federal income tax withholding. To get exemption, you must satisfy both of the following criteria; Paycheck tax calculator helps you in determining the same.
1) If the employee received a refund in the previous year calculated from all of federal income tax withheld from your paycheck. As the employee has no tax liability pending from his side.
2) If the income is low in the current year the employee expect a refund from tax authorities because all federal income tax withheld and your tax liability also zero for the current year.Youcan mention the same in W-4 Form.
At the time filing the income tax return, the I.R.S. can check your tax return for the withhold tax against the deductions from your employer.
Federal Top Income Tax Rate
At the time of tax withholding by the organization, employees face a swap between higher paychecks and a low federal taxes. The more the employee claims allowances and deduction on W-4, the higher will be the paycheck amount. If the employees do not have much allowances and benefits his withholding tax is more and he will receive lesser paychecks. One can see that difference by input the required information in to the
Paycheck tax calculator
In case if you have paid huge tax amount previous year and do not want to pay again in the current year you can request a certain amount of additional withholding from each paycheck. You can mention the same of this amount in the W-4 Form.
Withholding Taxes by FICA
Apart from the income tax withholding the other main federal component of your paycheck, withholding is for FICA taxes (Federal Insurance Contributions Act). Your FICA taxes are your contribution to the Social Security and Healthcare programs that you will have access to when your age grows. It is the savings for you to pay in the system.
2017 – 2018 Income Tax Slabs:
Single Fliers Married, Married,
Filing Jointly Filing Separately Head of Household
|$0 – $9,325||10.00%|
|$9,325 – $37,950||15.00%|
|$37,950 – $91,900||25.00%|
|$91,900 – $191,650||28.00%|
|$191,650 – $416,700||33.00%|
|$416,700 – $418,400||35.00%|
Paycheck as a Communication Tool
In olden days, the employees receive paycheck in a physical form; reminders, newsletter are attached to the paycheck and handed over to the employee in envelope.
Nowadays all the Paystub and communications are sent through electronically to the employees. The paycheck stub shows the employee how much vacation time, sick time, or paid time off (PTO) was accrued during the period.
Companies also outsource payroll services to third-party vendor such as ADP to process employee paychecks and they will send paycheck stub or Pay Slip through electronically. Employees have access to their records online on their websites.
Paycheck stub also known as pay slip is a statement showing the details of the earnings and deductions of the employee and the tax to be paid or refunded during each pay period.
Payroll deductions depend on the individual employee and the employer’s benefits offerings. The employee can check electronically paycheck stubs or Pay Slips:
- Start date and end date of the payroll period.
- Gross pay: The total amount payable to the employee by the employer before deductions.
- Net pay: The amount payable to the employee after deductions.
- Federal taxes : The taxes to be deducted as per the Federal Law
- State taxes withheld the taxes to be deducted by the states separately.
- Local taxes: Any local taxes specially imposed by the states. Normally all the states will not charge these taxes.
- Any Insurance deductions by the employees.
- Healthcare related deductions.
- Social Security deduction
- Retirement benefits deductions
- Wage garnishments
PAYCHEK CALCULATOR / PAYCHECK TAX CALCULATOR PROVIDERS ONLINE
Many corporate companies have large number of employees. It is difficult to manage payroll and paycheck related queries, as the work force is limited. Paycheck calculators / paycheck tax calculator serves as platform between employers and employees. It provides self-service portals (ESS) that can be used by both.