There are quite a few responsibilities that come along with running a small business–and if we’re talking about priority, payroll taxes are at the top as one of the most integral elements to manage. Honestly, it doesn’t matter whether you’re a small business owner or part of a huge conglomerate, you have to accurately calculate and withhold the right amount of taxes from your employees. While this can be a complicated and time-consuming feat to do manually, you can employ the help of an employer payroll tax calculator to totally streamline the process. That’s why, today, we’re diving into what an employer payroll tax calculator is, how to use it, and some of the benefits your business stands to reap by implementing it into your payroll management operations.
What is an Employer Payroll Tax Calculator?
Simply put, an employer payroll tax calculator is designed to help businesses like yours calculate the exact amount of taxes they’ll need to withhold from the checks of their employees. Typically, it’ll compute an array of payroll-related taxes, whether we’re talking about income tax, Social Security, Medicare, state and local taxes, as well as unemployment taxes. Your employer payroll tax calculator will factor in your employees’ filing statuses, tax deductions, and wages so that you can be sure the right amount of tax is withheld.
Why Use an Employer Payroll Tax Calculator?
If you’re in charge of managing payroll, then you know how important it is to be accurate in your calculations and reports. Taking the manual route can open you up to errors, not to mention the fact that payroll tax rates fluctuate pretty frequently. That’s exactly where your employer payroll tax calculator will come in. Here are a few key reasons that you should implement one into your small business operations:
Time-Saving
When it comes to manual calculations and payroll, the task could take hours. When you’re dealing with multiple employees and an array of tax rates, an employee payroll tax calculator will totally streamline the process through automated calculations.
Accuracy
Since this is an automated tool, the mitigation of calculation errors is inevitable, which is a real lifesaver, especially as your business continues to scale. If you don’t have any in-house payroll expertise, an employer payroll tax calculator will open your company up to a whole new level of organization.
Regulatory Compliance
You can count on tax laws and rates changing with the wind, so a payroll tax estimation tool will definitely come in handy. It will make sure that your business is always up-to-date and in compliance with the latest industry regulations.
Better Financial Management
When you employ the help of an employer payroll tax calculator, your business will be able to make data-informed decisions when it comes to budgeting for payroll liabilities. If you want more effective financial planning, utilize an employer payroll tax calculator.
How to Use an Employer Payroll Tax Calculator
When you start using an employer payroll tax calculator, you’ll notice that it’s pretty straightforward. Here are a few steps to get you on your journey to a more streamlined future:
Step 1: Input Employee Information
First off, you’ll want to submit the employee’s gross pay into your employer payroll tax calculator. Your input should cover the wages, bonuses, commissions, or any other income type that the employee earned over the duration of the pay period. Make sure that you are double-checking the amounts you input to avoid any hiccups later.
Step 2: Enter Tax Information
Next up, you’ll have to enter all of the related information. You’ll probably need the employee’s filing status, number of dependents, whatever tax deductions are applicable, and allowances that they are eligible for. Your payroll tax estimation tool will utilize this info and calculate the accurate withholdings.
Step 3: Select Tax Rates
It’s important to note that different states, cities, and counties and different payroll tax rates. On your calculator, make sure that you’re selecting all of the appropriate tax rates for your employees’ locations. From there, your payroll tax estimation tool will calculate the withholdings.
Step 4: Calculate Payroll Taxes
Once all of the information is submitted, your employer payroll tax calculator will process all of the data and give you an itemized breakdown.
Step 5: Review and Submit
Make sure that you review all of the calculated results so that you know it’s all accurate. You’ll use the calculated figures to process your payroll and withhold all of the taxes appropriate for the respective employees. Now that you understand how important an employer payroll tax calculator is for small businesses, integrating it into your payroll operations is the next step. If you’re not sure where to start, the Estess team can help! We have worked closely with small businesses all across New Orleans to scale their businesses by streamlining their financial tasks. Our experts stay up-to-date on all industry practices when it comes to accounting so that you can focus more on your business. Are you ready to simplify your payroll process? Click here to talk to the Estess team. Let us handle the numbers.
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