The percentage of taxes calculated for salaries varies by the employee, since each employer has income deductions that are based on the retention of benefits for each worker. However, you can use the information to calculate the tax withholding percentage of each person’s salary or use the information to calculate the average percentage of all issued salaries.
Calculation of the percentage of taxes by salaries
- Calculate the employee’s net payment during the pay period. You must calculate each net payment separately.
- Use the W-4 form of the ISR that the employee gave you to determine the marital status and the employee retention number declared by the employee. If your state tax department uses another form of withholding benefits similar to Form W-4, you should also mention the withholding of benefits declared by the employee in this state form, as they may differ from the items declared by the employee in the shape of the ISR.
- Obtain the tax withholding tables of the ISR and state income. Use ISR publication 15 that you can find on the ISR website to obtain federal income withholding. Visit the website of your state revenue department to obtain the state income tax withholding tables.
- Find the federal and state tax withholding table for your payroll frequency and the employee’s marital status and the number of exemptions declared. Match the employee’s net pay in the table and record the federal and state income you calculated.
- Multiply the employee’s net pay by 7.65 percent. The result is equal to the employee’s social security and medical insurance deductions.
- Calculate the total amount of the withholding tax on the employee’s check. Divide the result of the employee’s net payment to determine the percentage of taxes taken from the payroll. If you want to calculate the percentage for all employees, calculate the taxes you calculated on each employee’s check and find the total result. Calculate the total amount of net salaries you paid during the payment period and divide the total withholding tax amount to find the result.