How to Calculate Your Tax Every Month From Your Salary
If you have no voluntary deductions, all of your gross income minus your tax deductions equals your take-home pay. As a salaried employee, you likely receive a fixed sum each pay period, which stays constant unless you have a change in your pay or withholding conditions. Specifically, if you're salaried, your tax deductions will likely stay the same. To compute the amount of taxes that are taken out of your salary each month, follow the administering agency's guidelines.
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1.
Retrieve your filing status and allowances from lines 3 and 5 of your W-4 form and apply the IRS Circular E tax table that matches this information, plus your gross salary and pay period, to figure out federal income tax. Assume that you earn $4,200 monthly and claim married with one allowance on your W-4: According to page 53 of the 2011 Circular E, your federal income tax withholding is $417 per month.
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Calculate Social Security tax at 4.2 percent of your gross salary up to $106,800 for the year, and Medicare tax at 1.45 percent of all of your gross compensation, for 2011. Assuming that you earn $3,800 monthly, your Social Security withholding is $159.60, which is the equivalent of $3,800 x .042.
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Calculate state and local taxes, if applicable. Consult your state revenue agency for state and local taxes that you may be required to pay. For example, Florida does not require employees to pay state or local income tax, but New York State and New York City require employees to pay state and city income tax, respectively. The calculation method for state and local taxes varies. Assume that you work and live in Pennsylvania: For 2011, calculate state income tax at 3.07 percent of your gross salary per month.
References
Resources
Tips
- Most states require employers to give employees a pay stub showing wages paid and tax deductions for the pay period.
Writer Bio
Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.