Paycheck calculator new jersey 1. Gross Pay: The first step in calculating a paycheck is to determine the gross pay, which is the total amount of money earned by an employee before any deductions are taken out. Gross pay can be calculated by multiplying the hourly wage by the number of hours worked, or by dividing the annual salary by the number of pay periods in a year. 2. Federal Income Tax: The next step is to calculate the federal income tax withholding. The amount of federal income tax withheld from an employee's paycheck depends on their filing status, exemptions, and the amount of their taxable wages. The IRS provides a withholding allowance calculator on their website to help employers determine the correct amount of federal income tax to withhold. 3. FICA Taxes: FICA taxes, which consist of Social Security and Medicare taxes, are also withheld from an employee's paycheck. The current Social Security tax rate is 6.2% of an employee's taxable wages, up to a maximum amount of $142,800 for 2021. The current Medicare tax rate is 1.45% of an employee's taxable wages, with no maximum limit. 4. New Jersey State Income Tax: Some municipalities in New Jersey also impose a local income tax, such as the City of Newark and the City of Trenton. Employers are required to withhold local income tax based on the employee's residence and the local tax rates. 7. Other Deductions: Other deductions that may be withheld from an employee's paycheck include health insurance premiums, retirement contributions, and garnishments for child support or other court-ordered payments. 8. Net Pay: Once all deductions have been taken out, the remaining amount is the employee's net pay, which is the amount they receive in their paycheck. It's important to note that New Jersey employers are required to provide their employees with a written statement of their earnings, deductions, and net pay for each pay period. Employers must also keep accurate records of their employees' wages and deductions for at least six years. The next step is to calculate the federal income tax withholding. The amount of federal income tax withheld from an employee's paycheck depends on their filing status, exemptions, and the amount of their taxable wages. The IRS provides a withholding allowance calculator on their website to help employers determine the correct amount of federal income tax to withhold. 3. FICA Taxes: FICA taxes, which consist of Social Security and Medicare taxes, are also withheld from an employee's paycheck. The current Social Security tax rate is 6.2% of an employee's taxable wages, up to a maximum amount of $142,800 for 2021. The current Medicare tax rate is 1.45% of an employee's taxable wages, with no maximum limit. 4. New Jersey State Income Tax: