Paycheck Manager Blog: Online Payroll Tax Calculator Software

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Payroll Taxes

Ready to bring on your first employee? Use our small business employer payroll tax calculator to figure out payroll taxes.

October 1st, 2018

So you’re a small business owner ready to bring on your first employee. This is a big step and sometimes you are not sure where to start.  Getting payroll started for your company can be a daunting task. To make it simple here are some payroll basics you need to know.

  • Your business is essentially working for the government to collect employee payroll taxes, pay taxes, and then file reports on the taxes. This breaks down into three critical employee payroll functions:
    • Calculate and withhold the proper amount of payroll taxes on each paycheck
    • Deposit the withheld payroll taxes to the government as required
    • File payroll reports to the government as required
  • You’ll need to do these functions for Federal and State government. Here is quick break down of the employee payroll taxes for each.
    • Federal – (1) income tax (2) social security & (3) medicare taxes
    • State – taxes vary for different States, which can include income tax, disability, unemployment insurance, etc. You should check with the State and know the type of applicable taxes.

Bringing on a new employee will cost a bit more than a contractor because the company must match Social Security, Medicare taxes and pay unemployment and other applicable taxes.  However, you will have more control over an employee than a contractor.

To help you calculate the payroll tax withholding of your new employee, use our Free Payroll tax calculator.  Paycheck Manager’s free paycheck calculator is an easy way for you to see what federal and state payroll taxes are needed and how much payroll tax withholding is required for your new employee. Go ahead and use our paycheck calculator to safely try out different payroll scenarios.  This way you can see how much payroll taxes you will need to withhold for each employee, and to see if you can afford to bring on a new employee.

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