Payroll Calculator — Free Employee Payroll & Wage Calculator | AllInOneTools
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Payroll Calculator

Calculate gross pay, overtime, employee deductions, employer taxes, and net take-home pay for hourly and salaried workers. Supports all pay frequencies.

$
hrs
hrs
Deductions & Taxes
%
%
%
$
Net Pay (Per Period)
$1,724
take-home pay per paycheck
Gross Pay
$2,400
Total Deductions
$676
Employer Cost
$2,584
Annual Net
$44,824
👤 Employee Deductions
Gross Pay$2,400
Federal Tax-$288
Social Security (6.2%)-$149
Medicare (1.45%)-$35
State Tax-$120
401(k)$0
Health Insurance-$150
Net Pay$1,724
🏢 Employer Costs
Gross Wages$2,400
SS Match (6.2%)$149
Medicare Match (1.45%)$35
FUTA (0.6%)$14
Est. SUTA (~2.5%)$60
Total Employer Cost$2,658

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Payroll Explained: How Employee Pay and Employer Costs Are Calculated

Payroll is the process of calculating and distributing employee compensation, including gross pay, tax withholdings, benefit deductions, and employer-side taxes. Whether you are a small business owner running payroll for the first time or an employee trying to understand your paycheck, knowing how each number is derived helps you plan accurately and avoid costly errors.

Gross Pay Calculation

Hourly Employee:
Regular Pay = Hourly Rate × Regular Hours
Overtime Pay = Hourly Rate × 1.5 × OT Hours
Gross Pay = Regular + Overtime

Salaried Employee:
Gross Per Period = Annual Salary ÷ Pay Periods/Year

Example: $30/hr, 80 regular + 5 OT hours (biweekly)
Regular: $30 × 80 = $2,400
Overtime: $30 × 1.5 × 5 = $225
Gross Pay = $2,625

Employee Deductions

Every paycheck has mandatory and voluntary deductions. Federal income tax is withheld based on your W-4 and the IRS withholding tables — the effective rate depends on your income and filing status. Social Security is 6.2% of gross wages up to the annual wage base limit. Medicare is 1.45% on all wages with no cap, plus an additional 0.9% on wages exceeding $200,000. State and local taxes vary by jurisdiction. Voluntary deductions include 401(k) contributions, health insurance premiums, HSA/FSA, dental/vision, life insurance, and union dues.

Employer Tip: True Cost of an Employee
The true cost is typically 1.25-1.4x the salary. On a $65,000 salary, expect to pay roughly $4,973 in FICA match, $420 in FUTA, $1,625 in SUTA, plus health insurance ($6,000-$15,000/year for employer portion), workers comp, and other benefits. Total employer burden: $78,000-$90,000+ for a $65,000 employee.

Employer Payroll Taxes

Employers pay a matching share of FICA taxes: 6.2% Social Security and 1.45% Medicare. Additionally, employers owe FUTA (Federal Unemployment Tax) at 0.6% on the first $7,000 of each employee's wages (after state credit), and SUTA (State Unemployment Tax) at rates varying from 0.5% to 7%+ depending on state and experience rating. Workers' compensation insurance is another employer-only cost that varies by industry risk classification.

Common Payroll Mistakes
Misclassifying employees as independent contractors (triggers penalties and back taxes). Not paying overtime for non-exempt employees. Missing payroll tax deposit deadlines (IRS penalty: 2-15% of unpaid amount). Failing to withhold the additional 0.9% Medicare on wages over $200K. Not keeping accurate time records for hourly workers.

Pay Frequency Considerations

The most common pay frequencies are biweekly (26 pays/year, used by ~43% of US employers), weekly (52 pays), semi-monthly (24 pays), and monthly (12 pays). Biweekly is popular because it balances administrative workload with employee cash flow needs. Note that biweekly and semi-monthly are different: biweekly means every two weeks (some months have 3 paydays), while semi-monthly means twice per month on fixed dates (always 2 paydays). This distinction matters for calculating per-period deductions and employer tax deposits.

Frequently Asked Questions

How is payroll calculated? ▾
Gross pay = hours × rate (+ 1.5x overtime). Then subtract federal tax, Social Security (6.2%), Medicare (1.45%), state tax, and benefit deductions. Result is net pay.
What are employer payroll taxes? ▾
Employers pay matching SS (6.2%) and Medicare (1.45%), plus FUTA (0.6% on first $7K) and SUTA (varies 0.5-7%+). Total employer burden is roughly 7.65-12% on top of wages.
How is overtime calculated? ▾
FLSA requires 1.5x regular rate for hours over 40/week for non-exempt employees. Some states have daily overtime rules (e.g., California: 1.5x after 8 hrs/day).
Gross vs net pay? ▾
Gross = total earnings before deductions. Net = take-home after all deductions. Net is typically 65-80% of gross depending on tax bracket and deductions.
What deductions come from a paycheck? ▾
Federal/state income tax, Social Security, Medicare, health insurance, 401(k), HSA/FSA, dental/vision, life insurance, union dues, garnishments.
How much does an employee cost an employer? ▾
Typically 1.25-1.4x salary. Includes FICA match (7.65%), FUTA/SUTA, workers comp, health insurance, and other benefits on top of gross wages.