Payroll Calculator — Employee Net Pay & Employer Cost
Free US payroll calculator. Estimate employee net pay per paycheck, federal and state withholding, employee and employer FICA, unemployment tax, 401(k) match, and total cost of employment.
1. Employee Information
Adjusts the effective federal tax rate multiplier.
Rough estimate — full W-4 modeling is not applied.
2. Tax & Deduction Rates
Estimated effective rate. Not a bracket rate.
Use 0 for no-income-tax states.
Standard 6.2% — capped at wage base.
Standard 1.45% — no wage cap.
Applies above $200,000 wages.
Employer share — SS capped, Medicare not.
2024 US wage base limit.
$200,000 employee withholding threshold.
Net FUTA rate after state credit.
First $7,000 of wages per employee per year.
3. Benefits & Deductions
Percent of gross pay contributed by the employee.
Percent of gross matched by employer.
Union dues, garnishments, etc.
4. Reference & Notes
PAYROLL ANALYSIS
Employee Compensation & Tax Breakdown
Reference: PAY-2026-001
Date:
EmployeeJohn Doe
Annual Salary$75,000.00
Pay FrequencyBi-weekly
Net Pay / Paycheck$2,024.05
👤 Employee Side
Gross Pay$2,884.62
Federal Tax-$346.15
State Tax-$173.08
Social Security-$178.85
Medicare-$41.83
Add. Medicare-$0.00
401(k)-$144.23
Health Insurance-$150.00
Other-$50.00
Net Pay$1,800.48
🏢 Employer Side
Gross Pay$2,884.62
Employer SS-$178.85
Employer Medicare-$41.83
Unemployment-$0.00
401(k) Match-$86.54
Total Employer Cost$3,191.84
Annual Payroll Summary
Annual Gross$75,000.00
Annual Net Pay$46,812.48
Annual Taxes$19,230.56
Total Employer Cost$82,987.84
Annual Tax Summary
Federal Income Tax$9,000.00
State Income Tax$4,500.00
Employee FICA$5,730.56
Employer Taxes$5,987.84
Total Tax Withheld (Employee)$19,230.56
Payroll Methodology
Net Pay = Gross Pay − (Federal + State + FICA + Deductions)
Social Security is capped at the wage base; Medicare is not. Unemployment tax applies to the first $7,000 of annual wages.
Estimate only — actual withholding depends on W-4 elections, state brackets, and pre-tax deductions.
Notes
Payroll calculation for employee compensation
This is an educational estimate, not tax, legal, or payroll advice. Actual withholding depends on IRS Pub 15-T tables, W-4 elections, state rules, and pre-tax deductions. Consult a licensed payroll professional or CPA before running payroll.
Prepared By
Date
GUIDE
How to Use This Payroll Calculator
This free payroll calculator estimates employee net pay
per paycheck along with the total cost of employment — including
federal and state income tax withholding, employee and employer FICA
(Social Security and Medicare), unemployment tax, and any 401(k) match. Use it to
plan cash flow, benchmark an offer, or sanity-check what a payroll provider is
actually withholding before you issue paychecks. Pair it with our
Cash Burn Rate Calculator
or Profit Margin Calculator
to see how payroll loads affect overall business runway and profitability.
1
Enter Employee Info
Name, annual salary, pay frequency, filing status, dependents, and state of employment.
2
Set Tax Rates
Effective federal and state rates, plus Social Security, Medicare, Additional Medicare, and unemployment rates.
3
Add Benefits & Deductions
Health insurance premium, 401(k) contribution and match, and other per-paycheck deductions.
4
Review Results
Employee net pay, employer cost, and annual tax totals — all per paycheck and per year.
5
Save, Print or Export
Save a draft in your browser, print the payroll analysis, or download a PDF for records.
PAYROLL EDUCATION
What Does a Payroll Calculator Calculate?
A payroll calculator — sometimes called a
paycheck calculator or net pay calculator — converts
a gross salary into an employee's take-home pay and separately estimates the
employer's cost of employment. It is used by small business owners, HR teams,
accountants, and employees trying to understand their pay stub.
Key payroll calculations
Gross Pay: Annual salary divided by number of pay periods per year (52, 26, 24, or 12).
Federal Income Tax: Effective federal income tax withheld per pay period (based on W-4 and IRS Pub 15-T in practice; simplified here).
State Income Tax: Effective state income tax withheld (0% in TX, FL, WA, TN, NV and other no-income-tax states).
Social Security: 6.2% of gross wages up to the annual wage base.
Medicare: 1.45% of gross wages with no cap, plus 0.9% Additional Medicare above the threshold.
Employer FICA: Matches employee Social Security (capped) and Medicare (uncapped).
Unemployment Tax: FUTA and state unemployment on the first $7,000 of wages per employee per year.
Small Business Owners: Estimate the true cost of a new hire before making an offer.
HR and People Ops: Sanity-check payroll provider output or run quick estimates.
Accountants and Bookkeepers: Build salary budget scenarios and variance reports.
Employees: Understand where each dollar of gross pay goes.
Startup Founders: Model cash burn including payroll taxes and benefits.
METHODOLOGY
Payroll Calculator Methodology
MoneyTool uses US federal payroll rules of thumb and lets you override every rate so
you can align the estimate with your actual situation. The calculator is transparent
about what it does and does not capture.
1. Gross pay per period
Gross pay = Annual salary ÷ Pay periods per year
Where pay periods are 52 (weekly), 26 (biweekly), 24 (semimonthly), or 12 (monthly).
2. Social Security tax
SS tax = min(annual wage, wage base) × SS rate ÷ pay periods
Applies to the first $168,600 of wages in 2024 (adjusted annually). Capped for both employee and employer.
Employee-only. Withheld by employers once wages exceed $200,000 regardless of filing status.
5. Unemployment tax (FUTA)
FUTA = min(annual wage, $7,000) × net rate ÷ pay periods
The standard net FUTA rate after the state credit is 0.6%. State unemployment may add more.
6. Federal and state income tax
The calculator uses an effective rate entered by the user, adjusted
by a filing-status multiplier. This is an approximation, not the full IRS Pub 15-T
bracket table, and not a W-4 model. For accurate withholding, your payroll provider
applies bracket tables to each pay period.
7. Net pay and employer cost
Net pay = Gross pay − (Federal + State + SS + Medicare + Add. Medicare + 401(k) + Health insurance + Other deductions)
Employer cost = Gross pay + Employer SS + Employer Medicare + Unemployment + 401(k) match
Important assumptions and limits
Federal and state withholding use effective rates, not the official bracket tables.
W-4 line-item modeling (Step 3 credits, Step 4 extra withholding) is not applied.
Pre-tax vs post-tax treatment of benefits is not distinguished (health insurance and 401(k) treated as reducing net pay).
State-specific rules (SDI, paid family leave, local taxes) are not modeled.
FICA wage base, Additional Medicare threshold, and FUTA wage base are user-editable to match the current year.
This is an educational estimate, not a payroll system. Always verify with a licensed payroll provider or CPA.
E-E-A-T & SOURCES
Payroll Information, Sources & Editorial Review
MoneyTool separates calculation results from tax education and employer-specific
requirements. The calculator uses documented US federal payroll rules of thumb, while
external payroll guidance should be verified with authoritative sources and your
payroll provider.
Author and editorial responsibility
Methodology reviewed by the
MoneyTool Finance Expert Team,
a group of accountants, CPAs, and personal-finance analysts who maintain
MoneyTool's calculator library and financial education content.
Last reviewed:
| US federal payroll tax rules of thumb (2024)
Next review: When calculation logic, supported inputs, or relevant guidance changes.
Authoritative U.S. payroll and tax resources
Internal Revenue Service (IRS) — Publication 15 (Circular E):IRS Pub 15
is the Employer's Tax Guide — the primary source for federal withholding, FICA, and FUTA.
IRS — Publication 15-T:IRS Pub 15-T
provides the federal income tax withholding methods and bracket tables for 2024 and beyond.
IRS — Form W-4:IRS Form W-4
is the Employee's Withholding Certificate that determines federal withholding.
Social Security Administration (SSA) — Contribution and Benefit Base:SSA Wage Base
lists the annual Social Security wage base for each year.
IRS — Topic No. 751 (Social Security and Medicare Withholding Rates):IRS Topic 751
covers employee and employer FICA rates and the Additional Medicare Tax.
IRS — Topic No. 759 (Additional Medicare Tax):IRS Topic 759
covers the 0.9% Additional Medicare Tax thresholds and withholding rules.
U.S. Department of Labor (DOL) — Wage and Hour Division:DOL Wage and Hour Division
covers FLSA rules on pay frequency, overtime, and recordkeeping.
U.S. Small Business Administration (SBA) — Payroll:SBA Payroll & Tax Guidance
covers payroll setup, deposit schedules, and small business tax obligations.
External resources are provided for education and verification. MoneyTool is not affiliated
with or endorsed by the IRS, SSA, DOL, or SBA.
BEST PRACTICES
Tips for Payroll Management
Accurate payroll is a compliance obligation, not just an operational task. Small
errors compound quickly across a workforce.
📊
Understand Tax Obligations
Know federal, state, and local payroll requirements before your first pay run.
📈
Use Current Rates
FICA wage base, FUTA base, and state rates change annually — update your setup each year.
💰
Factor In Total Load
Employer taxes and benefits typically add 15–30% on top of gross pay.
🎯
Stay Compliant
Deposit payroll taxes on time and file quarterly and annual returns.
🔄
Review Annually
Reconcile payroll provider reports against your general ledger every quarter.
✅
Consult a Professional
For multi-state or international payroll, engage a licensed payroll provider or CPA.
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What is the difference between gross pay and net pay?
Gross pay is the total amount an employee earns before any deductions. Net pay is the amount the employee actually receives after federal income tax, state income tax, FICA, and voluntary deductions like health insurance and 401(k) contributions are withheld.
What is FICA and how is it split between employee and employer?
FICA (Federal Insurance Contributions Act) is split into Social Security (6.2%) and Medicare (1.45%). The employee pays 7.65% and the employer matches 7.65%, for a combined 15.3%. Social Security is capped at the annual wage base; Medicare has no cap, and an additional 0.9% applies to wages above the Additional Medicare thresholds.
What is the Social Security wage base limit?
The Social Security wage base is the annual maximum amount of earnings subject to Social Security tax. For 2024 it is $168,600 and it is adjusted annually by the Social Security Administration based on national wage growth.
What is the Additional Medicare Tax?
The Additional Medicare Tax is a 0.9% employee-only tax on wages above $200,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately. Employers withhold it once wages exceed $200,000 regardless of filing status.
How much is FUTA unemployment tax?
Federal Unemployment Tax Act (FUTA) tax is 6.0% on the first $7,000 of wages paid per employee per year, with a standard credit of up to 5.4% for state unemployment taxes paid, resulting in a typical net FUTA rate of 0.6%.
Is this payroll calculator free?
Yes. MoneyTool provides this payroll calculator free for educational and planning use.
Can I save my payroll calculation?
Yes. Save Draft stores the calculator inputs in your browser. Print Results and Download PDF can be used to keep a copy of the displayed analysis.
LEGAL
Payroll Calculator Disclaimer
This payroll calculator provides estimates for informational and educational
purposes. It does not constitute tax, legal, accounting, or payroll advice. Actual
payroll withholding and employer tax liability depend on IRS Pub 15-T tables,
employee W-4 elections, state and local rules, pre-tax deductions, and other
factors not modeled here.
Estimates only: Results depend on the inputs and assumptions described in the methodology.
Not a payroll system: Do not use this calculator to issue paychecks or file payroll tax returns.
No tax advice: Consult a CPA, Enrolled Agent, or licensed payroll provider for compliance questions.
Annual changes: FICA wage base, Additional Medicare thresholds, and FUTA base change annually — verify current figures with the IRS and SSA.
Last methodology review: .
Calculator logic and educational content should be reviewed again whenever the methodology,
supported inputs, or relevant external guidance changes.
