When you are doing your own payroll and don’t make use of payroll services, you should know how to calculate payroll taxes yourself. If you are not a qualified bookkeeper, you can find it hard to calculate your taxes correctly without making any errors. Here are some easy steps on how to correctly calculate your payroll taxes.
Determine worker gross pay
The first thing that you should do when you are doing your payroll is that you must determine your workers gross pay. You are doing this by calculating all his salary with his overpay and other taxable amount that you must pay the worker. You must make sure that you don’t make any errors with this step. This can result in you losing money or your workers getting not enough money. Read more!
Check the W4 form
You must also remember that you should check all the worker’s W4 forms for filing status and withholding allowances. You must know if they are married and with how many allowances they have. If there isn’t any W4 form for a worker, you can be sure that he is single with no allowances. This is also a very important step if you are busy with your payroll services.
Get the withholding amount for the Federal income tax
You should get the withholding amount for the federal income tax. You will find in the IRS Publication 15 (Circular E).You can either choose the percentage method or you can choose the wage bracket method and use that specific chart.
Next up: social security taxes
The next thing that you should calculate when you are doing your payroll servicesis the social security taxes of each and every worker. Before you can calculate the social security taxes, you need to know the percentage that you should calculate and from which salaryscale, the worker is paying social security taxes. If you are not sure, you must find this out. This is quite important to know before you can proceed. Click here for more information: https://www.solarlakeland.com/what-are-the-duties-of-a-payroll-officer/
Here you should also know the precise percentage that you should calculate. No error is acceptable. Every worker must pay this tax. There is no excuse for not paying your Medicare taxes. Everyone that is getting a salary, no matter how much should pay Medicare taxes.
Calculate your contribution of social security taxes and Medicare taxes
You must remember that you must pay a certain amount of social security taxes and Medicare taxes for your workers as well. There is also a certain percentage that you should calculate. You can’t afford to make any error in this step. This is very important for you and for your workers. This is part of your payroll services that you as employee must pay.
Calculating your own payroll is very difficult and if you don’t have any previous knowledge of bookkeeping and accounting, you are going to struggle. It is best to consider outsourcing your payroll to an experienced and trustworthy company like Payrollserviceaustralia.com.au, this is so much easier and you will have less worry about your payroll.