Paycheck Estimator

No one wants to be bogged down with payroll tax calculations. There are easier and better options. A paycheck estimator can help alleviate the pain. It figures the calculations, deductions and filings, and keeps the headaches away.

If an employer or employee needs help with payroll calculations or determining a net check amount, help is here. A paycheck estimator can estimate the amounts to be withheld from the employee for payroll taxes or any other deductions that may apply.

The term paycheck refers to the wages an employee earns from an employer. While, typically, an employer does not have the time to examine hundreds of lines of tax codes or phonebook-thick human resources guides to find answers, access to instant answers are available through a paycheck estimator.

The estimator determines the amount of federal income, Social Security, and Medicare taxes to be withheld from an employee's paycheck, as outlined in the Internal Revenue Service's Employer's Tax Guide (Publication 15 Circular E). It also takes into account the amount of pre-tax 401(k) or 403(b) plan contributions that are made, as well as pre-tax flexible spending account contributions for health care and dependent care expenses before figuring the amount of taxes to withhold.

An employee's net income is determined by (1) gross amount of wages, less (2) Federal Withholding taxes determined by the filing status on a W-4 Form, (3) State Income Taxes (if applicable), and (4) any other deductions as determined by the employee.

The estimator will also determine the net amount of pay left over after all income extractions. An employee can even see what his or her paycheck will look like after a raise.

Depending on what state the employee lives in determines state income tax liability. There are nine states excluded from state income tax: Florida, Alaska, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming.

To keep a small business compliant and running with optimum speed, many resource centers have been created with a consolidation of experts at the helm, and kicking off the New Year. How better to kick it off but with an opportunity to keep the government's paws off a majority of the paychecks.