If you are an employer or a self-employed individual it is your responsibility to pay your taxes on time. After withholding the tax deductions the employer can release pay checks to the staff. Now the problem faced by many of the small firms is to know how to calculate the amount of withholdings and the net take home pay.
Paycheck Calculator is a simple and automated way of calculating the salaries and the taxable withholdings. In case of an employer, it is his sole responsibility to calculate tax and deduct that amount from the gross value. Apart from this even the individual has to declare his/her other means of income other than the salary being received. You have to pay tax on the net income earned from all the sources.
Using Paycheck Calculator
Pay Check Calculator requires the details of the latest tax rates imposed by the government to calculate the correct taxes. The sheet has three main sections, first one is used to show the Gross Pay, second one for calculating your pay check and a third one is a graphical representations of the pay check.
This template makes use of Federal Tax brackets to understand the final calculations. These brackets are included into the subsequent worksheets. The tables are Federal Tax table and California Tax table (for California pay check calculator only). The tax brackets from these two worksheets are used to calculate the net amount of your pay check. The tables should be updated annually as per the government rules.
Employer releases the pay checks weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annually and annually depending on the employee type. You need to enter the employee details like the Gross Pay, Payment Frequency, Filing status, Number of Allowances, Pre- Tax Withholdings, State and Local Tax details, FICA (Federal Insurance Contribution Act) details, Post Tax Deductions and Post Tax Reimbursements.
This template is best for individuals and professionals like Charted Accountants who have to calculate pay checks for many individuals. It is very important to deduct the correct withholdings and to submit the transparent and clear records. You cannot afford to make a single mistake as it can land you up in penalties as per law. This is the most flexible, fast and accurate way of filing your taxes. All your federal and state taxes are automatically calculated and you can be assured of its correctness with this template. Whether your social status is Single, Married or Unmarried (Head of family), it takes care of all through its method tables.
Tax filing is otherwise considered a cumbersome and a complex task. But the Pay Check Calculator is strongly recommended for you, if you are doing this tedious task on your own or for many individuals. Paying taxes on time saves you from the hassle of legal battles or late payment charges if any. Tax are the most important source of revenue for the government, it is this money that is used by the government in development and civic maintenance.