Anything that is related to the tax matter must be checked carefully. There are so many types of the taxes that we have to play. No matter what types of the tax, we have to carefully count and calculate the amount of money that we have to pay. One of the examples of the taxes that we have to calculate carefully is the payroll tax.
- Every business has to pay the payroll tax even the small business with just few employers.
- Big companies usually can hire special accountant to calculate the amount of the taxes that have to be paid.
However, if you run a small business, it is important for you to learn How to Calculate Payroll Taxes.
So, How to Calculate Payroll Taxes? Well you do not have to worry; you can learn how to calculate the amount of the tax step by step so that you can determine the amount of money that is needed to pay the payroll tax.
- The first thing that you should so is to make sure that the employee fills up the W-4 form from the Internal Revenue Service. By filling up the form we can find out the number of the payroll tax based on marital status and the number of dependants.
- The next step is to determine the employee’s gross pay. The gross pay is including the salary plus the commission, tips and other additional wages and taxable compensation.
- After you accumulate the payment, you can multiply the number by the data based on the W-4 form.
- The next thing that you can do is by calculating the federal income tax to be withheld. To calculate the number, you have to know any state of local income tax to be withheld.
Since each state has its own way to calculate the tax, you have to make sure that you know How to Calculate Payroll Taxes based on the local law.