Payroll Calculator

Payroll processing involves calculating multiple deductions from an employee's gross pay. Federal income tax withholding depends on the employee's W-4 form — their filing status, number of dependents, and any additional withholding requested. For 2024, Social Security tax is 6.2% of gross wages up to $168,600, and Medicare is 1.45% with no cap (plus an additional 0.9% on wages above $200,000). Employers match both, effectively doubling the cost. State income taxes vary from 0% in nine states to over 13% in California. An employee earning $5,000 per bi-weekly pay period might see $725 withheld for federal tax, $310 for Social Security, $72.50 for Medicare, and $250 for state tax — taking home roughly $3,642 before any voluntary deductions. Pre-tax benefits like 401(k) contributions and health insurance premiums reduce taxable income, making them especially valuable in higher brackets. This calculator models all these components so you can verify payroll accuracy or plan hiring costs.

The true cost of an employee is typically 1.25 to 1.4 times their salary. On a $70,000 salary, employer-side costs include $4,340 for Social Security match, $1,015 for Medicare match, $420 for federal unemployment tax (FUTA), state unemployment tax (varying by state and experience rating, often $200-$2,000), workers' compensation insurance ($500-$3,000 depending on industry), and benefits like health insurance ($6,000-$15,000 for employer contribution). This means a $70,000 employee can cost $87,000-$98,000 total. Small business owners use this calculator to budget accurately when planning new hires. It is also useful for employees negotiating compensation — understanding the full cost helps frame requests for raises or benefits changes. All payroll data entered stays entirely in your browser, which matters when you are working with real employee salaries and tax identification information.