How do i calculate federal payroll taxes?
Calculate federal income tax using the IRS Publication 15 (Circular E). Furthermore, consult your Form W-4 for your filing status and number of allowances.Apply the Internal Revenue Service’s Circular E’s wage bracket method if you have less than 10 allowances and your earnings are within the wage bracket limit. For instance, say you earn $700 biweekly and claim married/0. Your federal income tax would be $18. Use the percentage method if you have more than 10 allowances; your wages are more than the wage bracket limit; or if you do not want to use the wage bracket method.Calculate Social Security and Medicare (FICA) taxes. For 2010, the rates were 6.2 percent of gross income, up to yearly income limit of $106,800, and 1.45 percent of all gross wages, respectively. Here’s the calculation if you earn $470 weekly: Social Security calculation: $470 x .062 = $29.14 Medicare calculation: $470 x .0145 = $6.82 Your employer pays a matching amount for FICA taxes.
