';html+='Gross Pay: $'+gross.toFixed(2)+'
';html+='Pre-tax Deductions: -$'+other.toFixed(2)+'
';html+='Federal Tax ('+fedRate+'%): -$'+fedTax.toFixed(2)+'
';html+='State Tax ('+stateRate+'%): -$'+stateTax.toFixed(2)+'
';html+='FICA Social Security (6.2%): -$'+ficaSocSec.toFixed(2)+'
';html+='FICA Medicare (1.45%): -$'+ficaMedicare.toFixed(2)+'
';html+='
Estimated Net Pay: $'+netPay.toFixed(2)+'
';html+='Annual Net Projection: $'+(netPay*freq).toLocaleString();document.getElementById('breakdown').innerHTML=html;document.getElementById('breakdown').style.display='block';}else{document.getElementById('breakdown').style.display='none';}}
How to Use the Payroll Calculator
Managing business finances or personal budgeting starts with understanding take-home pay. This payroll calculator helps employees and employers estimate the final "net pay" after common taxes and deductions are removed from the gross salary.
- Gross Pay per Period
- This is the total amount earned before any taxes or deductions. If you are salaried, divide your annual pay by your pay frequency (e.g., 26 for bi-weekly).
- Federal and State Tax Rates
- Enter the percentage of your income withheld for government taxes. These vary based on your tax bracket and location.
- FICA Contributions
- The calculator automatically includes the standard U.S. FICA rates: 6.2% for Social Security and 1.45% for Medicare.
- Other Deductions
- Include pre-tax contributions like 401(k) deposits, health insurance premiums, or HSA contributions.
The Payroll Calculation Formula
The journey from gross pay to net pay involves several mathematical steps. The basic formula utilized by our payroll calculator is:
Net Pay = Gross Pay – (Deductions + Federal Tax + State Tax + FICA)
- Gross Pay: Total hourly or salaried wages.
- Taxable Income: Gross Pay minus pre-tax deductions.
- FICA: Social Security (6.2%) and Medicare (1.45%) calculated on the full gross amount.
- Withholding: Percentage-based calculations for local and national governments.
Payroll Calculation Example
Scenario: An employee earns a gross salary of $3,000 per bi-weekly pay period. They contribute $200 to a 401(k). Their federal tax rate is 15% and state tax is 5%.
Step-by-Step Breakdown:
- Gross Pay: $3,000.00
- Pre-tax Deduction: $200.00 (Taxable income becomes $2,800)
- Federal Tax: $2,800 × 0.15 = $420.00
- State Tax: $2,800 × 0.05 = $140.00
- FICA Social Security: $3,000 × 0.062 = $186.00
- FICA Medicare: $3,000 × 0.0145 = $43.50
- Total Net Pay: $3,000 – $200 – $420 – $140 – $186 – $43.50 = $2,010.50
Common Payroll Questions
What is the difference between Gross and Net pay?
Gross pay is the "sticker price" of your salary—the total amount the employer pays before any government or voluntary subtractions. Net pay is your "take-home pay," which is the actual amount deposited into your bank account after all taxes and deductions are removed.
Why is FICA calculated differently?
FICA (Federal Insurance Contributions Act) taxes are usually calculated on the total gross pay, whereas income taxes are often calculated on "taxable income" (gross pay minus specific pre-tax deductions like medical insurance or 401k).
How many pay periods are in a year?
This depends on your employer's schedule: Weekly is 52 periods, Bi-weekly (every two weeks) is 26 periods, Semi-monthly (twice a month) is 24 periods, and Monthly is 12 periods.