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The second step is to determine the Pay Frequency of your Paycheck; it is how often the employees are paid. All States have their law for pay frequencies. Therefore, you must study the State Payroll law (discussed below in this step) before calculating the paycheck. Some of the standard Pay Frequencies are: California State Laws for Pay Frequencies...

The third step is to determine the Gross Pay of the employee. Gross Pay is the amount of money an employee has earned in the last pay period. It consists of several components that are essential to consider to calculate Income Taxes, Deductions, and contributions. Below are the essential components to deduce gross pay:

Here starts the complicated part. After the Gross Pay for the employee is deduced, the next thing an employer should do is refer to the W-4 tax form of an employee. This form is filled by the employee while joining the job. The form W4 contains all the essential details, including income tax details, marital status, and the number of allowances to ...

Taxable income is the income, which is used to determine the amount of taxes that should be withheld from the employee’s paycheck by the employer. It is different from Gross Pay. There is the portion of income that is exempted from the taxes, such as cash gifts, inheritances, rebates, Welfare income, child support, State and local tax refunds, Life...

As of now, the taxable income of an employee is deduced. The next step is to subtract any pre-tax contributions that were chosen by the employee. These contributions are designed to encourage employees to save for their retirement. Additionally, it further reduces the amount of taxable income, hence, increasing the take-home amount of an employee. ...

Before jumping on to Federal Taxes, it is essential to conclude the number of Allowances that an employee needs to claim. Allowances are exemptions from paying a certain amount of income tax. Therefore, the amount of withholding tax that an employer withholds from the employee’s paycheck is inversely proportional to the number of allowances claimed...

Once the final taxable income is calculated after subtracting all deductions (standard or itemized) and contributions, a certain amount is withheld by the employer from an employee's paycheck as federal income tax, along with the two federal (FICA) programs: Social Security and Medicare.

Now, as you are done with Federal Payroll Taxes, the next thing that you need to calculate is California State Taxes. The State of California’s Employment Development Department requires the employer to withhold four types of taxes, from which half are to be withheld from the employee's paycheck, and the rest is to be paid by the employer itself. T...

Although employees are not charged any post-tax deductions. However, they can choose some post-tax contributions and benefits. If an employee has opted some, then its employer's duty to account them into the employee's paycheck. Some of the common Post-Tax Contributions are: 1. Retirement funds like Roth 401(k). 2. A certain amount may also be with...