Learn More About Paycheck Manager and the Free Payroll Tax Calculator
1. What does Paycheck Manager's FREE Payroll Tax Calculator do?
The FREE Online Payroll Tax Calculator is a simple, flexible and convenient tool for figuring payroll deductions and taxes and printing pay stubs or paychecks.
An employer can use the calculator to compute and prepare employee paychecks. An employee can use the payroll calculator to compare net pay with different number of allowances, marital status or income levels. It is simple, flexible and easy to use and it is completely FREE!
2. How do I use the Payroll Tax Calculator?
The Online Payroll Tax Calculator is FREE, so we encourage you to 'play' with it to learn the ropes. We believe the payroll calculation process is fairly straight forward and once you give it a go, it'll become clear.
You can start things off by doing some of the following:
Please keep in mind that your information will NOT be saved after you leave our website. If you wish for the information to be saved, please give our Paycheck Manager software a try.
3. How do I print paychecks?
If you want to preprint actual paychecks with the eSmart calculator, make sure you have a laser printer (not Inkjet or thermal printers) and the standard 3-part blank check stocks.
The company, employee and bank information you entered will not be saved after you leave our website. The information you entered is used to prepare the check image in PDF format. You can save the check image to your computer and print it later. You will need an Acrobat Reader to view and print.
Because the MICR font at the bottom of the check (funny numbers) is critical for banks to scan your check, you need to use at least a laser printer with sufficient carbon content. There are special cartridges available for printing checks you may want to purchase should your bank have problem processing the checks.
Make sure you do not use 'Shrink to fit' function when setting your printer property because the function may change the specific location on the paycheck, thus causing difficulties for banks to scan. The bank often processes the check manually, though you may be charged if the problem continues.
4. How to avoid payroll penalty?
The IRS and the States assess penalties when the payroll tax deposit amount is short or late.
The payroll tax deposit due dates are different for different companies. For a billion-dollar company, the payroll taxes could be hundreds of millions each payday while the amount is very small for a one employee company. The IRS assigns each company a payroll tax deposit schedule (monthly, semi-weekly, quarterly or next banking day) based on the amount of employee payroll taxes. A new company with no prior payroll history is required to deposit payroll taxes monthly. After a period of time (could be 2 years), the IRS/State will adjust the deposit requirement based on the amount of business payroll taxes. For example, a company pays more than $50,000 payroll taxes in the look-back period, July of the year before to June of the prior year, will become a semi-weekly depositor for the current year.
Tip 1: Know the payroll tax deposit schedule of your company at the beginning of the year. If you do not know, contact the IRS and the State revenue department to verify. This is the most common cause of payroll penalty for businesses, especially growing small businesses.
Employer payroll taxes typically include Federal income tax, social security, Medicare, FUTA, State income tax, unemployment insurance and possibly other local taxes.
Income taxes, both Federal and State, are estimates. The withholding amount from each paycheck is computed based on marital status, # of exemptions and pay cycle. The exact amounts are reconciled when the employee files Federal 1040 and State tax returns. Unless the withholding is grossly under the liability (when filing 1040s), no penalty is accessed. On the other hand, if the withholding exceeds the liability, the IRS and the State will refund but will not add interests.
Social security, Medicare, FUTA taxes are generally the same for all employees. A good payroll software does not make mistakes if used correctly.
Unemployment insurance (UI) requirements are different for different States and the rate could be different for different companies. For example, a new California company starts with a UI rate of 3.4%. Overtime, depending on the claim-rate of the company employees, the rate could be adjusted up or down annually. UI is the responsibility of the company for California while other States may charge both the employees and the companies.
Tip 2: Know the UI rate of your company. If you do not know, contact the State revenue department to verify annually.
In addition to these taxes, California charges ETT (Employee Training Tax) and other States or local governments may charge additional employer payroll taxes at varying rates.
Tip 3: Select the correct payroll tax deposit schedule and enter the correct UI rate and local taxes in your company information, our software will compute the correct amounts and identify deposit due dates easily.
If you pay the taxes in full before the due dates, typically you will not be penalized, even if your reports, 941, 940 forms, e.g. are late.
5. How to use the sample company?
The sample company is created with 3 made-up employees. If you are not familiar with payroll process, the sample company is a great way to start.
You can start to create employee paychecks immediately. The company and employee names and IDs are made-up, but the employee payroll taxes and the paychecks are correct. You can create, print and save the paychecks information in minutes. If you do not edit the sample company first, a default UI rate and monthly payroll tax deposit schedule are used.
As soon as you have saved any check(s), our system computes the taxes and generates payroll reports accordingly. The tax amounts, due dates and reports are updated continuously as you create or edit more checks. This enables you to see the paychecks, understand taxes reporting requirements.
Edit and change the company and employees to your own
Quick start: You can edit the company and employee information after you have saved some checks for sample employees. The payroll reports (Form 941, 940, W2, etc.) will be prepared correctly with the revised information, including all saved checks. However, printouts of previously saved checks will not be saved and will show the sample information. You can delete previously saved checks and re-create with the correct company/employee information.
Update first: You can edit the company and employee information before you create any paycheck. This way, you do not need to delete or re-created previously saved checks.
Either way, you should enter the correct company State UI rate (Unemployment Insurance) and the IRS designated tax deposit schedule to ensure the accuracy and avoid penalty.
6. What is my payroll tax deposit schedule?
The best way to confirm the required payroll tax deposit schedule is to contact the IRS and/or the State revenue department. You can also follow the general guidelines below to determine the required payroll tax deposit schedule.
Look-back period is the 4 quarters consist of the 3rd, 4th quarter of last year and the 1st and 2nd quarter of current year, used to determine the deposit schedule for the next calendar year. The example below shows that the deposit schedule for year 2013 is “Monthly” and it is “Semi-weekly” for year 2014.
If your company has been in business for a period of time, the IRS determines the deposit schedule based on the amount of taxes from your prior payroll history. If the total business payroll tax for the look-back period is more than $50,000, your company needs to follow the semi-weekly payroll tax deposit schedule. If the amount is less than $50,000, your company can deposit taxes once a month.
If the tax amount for the prior or current quarter (expected) is less than $2,500 total, tax can be deposited when form 941 is filed (quarterly). If the total tax is more than $100,000 on any single payday, the tax needs to be deposited by the next banking day.
Depending on your payroll tax deposit schedule, the following days are important.
The following flow chart shows how to determine your specific deposit day.
7. How to print check with company name and bank information?
You need to enter a cell phone number first, our system will send you a code immediately. The bank information (routing number, account number, etc.) is entered on the same page as your company information. You can then create new checks and select the template to print the check with correct bank information. If you have the blank paper check stock, you can print real checks, sign and distribute to employees.
8. How to purchase blank check paper so I can print real checks?
You can purchase blank check paper stocks at your local Staples, etc., online or call us 408-935-8969. You need to purchase blank check paper with check on the top 1/3 of the page.
9. I cannot open the downloaded file (W2, e.g.)?
Because there are different copies for employee & employer, these copies are saved in a zipped folder. Please save the zipped folder first then unzip to see the copies inside (copy B, C, 1, 2, etc.). If you use a Mac, you may need to change the saved folder name from "xxx....ASPX" to "xxx....ZIP" then unzip to see the PDF copies inside. The W-3 is not zipped, so change it to .PDF if necessary.
10. I have not done payroll before, what do I need to do? Can I use Paycheckmanager.com?
Paycheckmanager.com is designed for small businesses to effectively manage their payrolls easily and at a low cost. You need to understand the basic payroll requirements, tax withholding, tax deposits and tax reporting. Although exremely simple, Paycheckmanager.com still requires some learning for you to use the tool correctly and effectively.
11. Will Paycheckmanager.com pay taxes and file payroll reports for us?
Paycheckmanager.com is more an online payroll software tool than a payroll service like ADP or Paychex. Users can create paychecks, generate payroll returns .
12. Where and how do I enter employee and W-4 information?'
The W-4 information (marital status, # of allowance) is on the paycheck calculator page. The employee can request to change it anytime.
13. The withholding amounts seem wrong, is the calculator accurate?
We have developed the payroll tax calculations since 1997. If the calculated amounts seem wrong, you may want to check the parameters used. The parameters are marital status, # of allowance and the paycycle. The paycycle is very important for calculating the estimated income taxes.
14. I am a new user, how do I enter the payroll information (YTD) for the earlier months of this year, so I can get corect W2, etc.?
The prior payroll information or Year-To-Date (YTD) amount cannot be changed directly. It is calculated based on saved checks. If you have prior paychecks before you start to use Paycheckmanager.com, you need to re-create the checks. You can create summary checks (one for each quarter for every employee, e.g.) so you can still create correct quarterly reports and year-end W2, etc.
15. Why are the YTD (year to date) amounts wrong on some of the checks? How do I change it?
If you edit, add or delete a previously saved check, the later checks for the employee will not be changed, including the YTD amount on the pay-stub. You can edit the later checks and "Calculate" to compute it again then the YTD will reflect the correct YTD at that moment. You can delete and re-create the check as well.
16. Can I change the withholding amount to withhold more (or less)?
When you "Calculate" taxes in Paycheckmanager.com, our system applies proper tax tables. You have the flexibility to adjust the income (Fed and State) tax withholding amounts to anything you want because they are estimates of actual tax liabilities. You can then click "Net" to complete the math and save the checks. You can change any amounts on the paycheck, but you should always start with "Calculate" so proper tax calculations are applied first.
17. How to handle tips? My servers divided up the tips already?
The tips need to be included in the tax calculation. You can add an earning item (+, add row) for the reported tips. The amount will be included as regular income for payroll tax calculation. Since the waiters have taken the money already, you can add an after-tax, misc adjustment of equal and negative amount to reduce the net check amount. Basically, you add the tips for tax calculation then deduct it after tax since the money is already taken.
18. My company has employees in different States, how can I calculate payroll taxes for different States?
Although Paycheckmanager.com calculate payroll taxes for all of the States, the system is limited to reporting for the employer's State. As a result, only taxes for the employer's State are calculated.
19. Can I use Paycheckmanager.com to create paychecks, W2s and payroll reports for prior years?
Yes, you can create checks for up to 3 prior years. All payroll returns and W2s can be created accordingly. You just need to make sure the year is selected and the proper check dates are used.
20. How to create and file 1099-misc for contractors?
Paycheckmanager.com is for payroll and employees. If you need to create and file 1099s for contractors, please visit www.eSmartpayroll.com or www.1099manager.com.
21. Is there a payroll report for Worker's Comp reporting?
Paycheckmanager.com does not have a customized report for Worker's comp. You can "Export" paycheck information to an Excel worksheet to get all details. You can then create a report for your Worker's comp reporting.
22. How to pay taxes to the IRS and the State?
For Federal payroll taxes, you can enroll in our EFTPS payment service ($25 per year) then you will be able to "make payment" directly from your account. We will make the payment from your bank account to the IRS account directly (not going through our account). Alternatively, you can use www.EFTPS.gov website to register and make payments based on the taxes calculated at Paycheckmanager.com. We offer tax deposit service for a few selected States (CA, e.g.) so you can make tax deposits directly from your account. Otherwise, please visit the State revenue department website to explore online or other payment options.
23. Can I used my own EFTPS PIN to pay taxes from Paycheckmanager.com?
You can not use your own EFTPS PIN to deposit taxes from Paycheckmanager.com. You need to enroll in our service and pay through our PIN.
24. Where do I enter the taxes I have already paid on my own?'>Where do I enter the taxes I have already paid on my own?
Currently, the system does not track the deposits you made on your own. The taxes you paid will be used to prepare the corresponsing tax forms. For example, when you prepare a form 941, you will be asked to enter the tax amount you have deposited. The default amount is full payment (assume you have paid all) though you can change the amount to reflect your actual payment.
25. What is signature PIN, form 8655, etc.? I have a PIN for EFTPS?
The IRS efile system for 941/944/940 forms require a signature PIN. There are several choices to use different types of PINs. The 94X eFile PIN is only good for filing 941/944/940 forms. It is different from EFTPS PIN or any other PINs you may have for different IRS eFile programs.
26. I cannot find the eFile for W-3 form?
Our system produces a W-3 form with your W2s. However, if you eFile W2s, you do not need to mail or eFile a W-3 to the SSA or IRS. The W-3 information is included in the W-2 data eFiled to the SSA.
27. I have paid & received an order number, but still cannot create checks?
The credit card transaction may have failed. Please check "Subscription & fee" under "My Account" for details on subscription period, payment history and transaction status.