Gusto Payroll Calculator

Gusto Payroll Estimator

Use this calculator to estimate the gross pay, net pay, and total employer costs for a single employee per pay period, similar to how a payroll service like Gusto would process it. This tool provides an approximation of federal and state payroll taxes and common deductions.

Weekly Bi-weekly Semi-monthly Monthly

Employee Federal Tax Information (W-4 Estimate)

Note: This calculator uses a simplified W-4 allowance system for federal income tax estimation, which may not perfectly reflect the current W-4 form.

Single Married Filing Jointly

State & Other Deductions

Employer Tax Information

Federal Unemployment Tax (FUTA) is typically 0.6% on the first $7,000 of wages. This is automatically included.

Understanding Your Payroll with Gusto

Payroll can be one of the most complex aspects of running a business, involving not just paying employees but also calculating and remitting various federal, state, and local taxes, as well as managing deductions for benefits. Services like Gusto simplify this process by automating calculations and filings.

What Does a Payroll Calculator Estimate?

A payroll calculator, like this one, helps you understand the breakdown of an employee's gross pay into their net (take-home) pay after deductions, and also the additional costs an employer incurs in the form of payroll taxes. Key components include:

• Gross Pay: The total amount an employee earns before any deductions.
• Employee Deductions: These are amounts withheld from an employee's gross pay. They typically include:
  • Federal Income Tax (FIT): Based on the employee's W-4 form, filing status, and allowances.
  • Social Security Tax: A federal tax that funds retirement, disability, and survivor benefits. Employees and employers each pay 6.2% on wages up to an annual limit.
  • Medicare Tax: A federal tax that funds hospital insurance. Employees and employers each pay 1.45% on all wages.
  • State Income Tax (SIT): Varies by state; some states have no income tax, while others have progressive rates.
  • Other Deductions: Such as health insurance premiums, 401(k) contributions, and other pre-tax or post-tax benefits.
• Net Pay: The amount an employee actually receives after all deductions are taken out. This is often referred to as "take-home pay."
• Employer Payroll Taxes: These are additional costs paid by the employer on top of the employee's gross wages. They include:
  • Employer Social Security & Medicare: The employer's matching portion of these federal taxes.
  • Federal Unemployment Tax Act (FUTA): A federal tax that funds unemployment benefits. Employers pay a small percentage on the first few thousand dollars of an employee's wages.
  • State Unemployment Insurance (SUI): A state-level tax that also funds unemployment benefits. Rates and wage bases vary significantly by state and employer.
• Total Payroll Cost: This is the true cost of an employee to the business, encompassing their gross pay plus all employer-paid payroll taxes.

How Gusto Simplifies Payroll

Gusto is a popular payroll platform designed to streamline these complex processes for businesses. It automates:

• Gross-to-Net Calculations: Accurately calculates all employee deductions.
• Tax Filings: Automatically calculates, files, and pays federal, state, and local payroll taxes.
• Benefits Administration: Integrates with health insurance, 401(k), and other benefits, deducting contributions directly.
• Compliance: Helps businesses stay compliant with ever-changing tax laws and regulations.
• Reporting: Provides detailed reports for accounting and business analysis.

Important Considerations

This calculator provides an estimate. Actual payroll calculations can be more complex due to:

• Specific State/Local Taxes: Many states have unique tax structures, and some cities or counties have their own local income taxes.
• Pre-Tax vs. Post-Tax Deductions: The order and taxability of deductions (e.g., health savings accounts, flexible spending accounts) can impact taxable income.
• Wage Bases: Annual limits for Social Security, FUTA, and SUI mean that taxes stop being collected once an employee's year-to-date earnings exceed these thresholds. This calculator estimates per-period, assuming wages are below annual limits for simplicity.
• New Hire Reporting & Other Compliance: Beyond taxes, there are other compliance requirements for employers.

For precise payroll processing and compliance, using a dedicated payroll service like Gusto is highly recommended.

Example Calculation:

Let's use the default values to see how the calculator works:

• Gross Pay per Pay Period: $2,000
• Pay Frequency: Bi-weekly (26 pay periods/year)
• Federal Filing Status: Single
• Federal Allowances: 2
• Estimated State Income Tax Rate: 5%
• Employee Health Insurance Premium: $100
• Employee 401(k) Contribution: $50
• Employer SUI Rate: 3.5%
• Employer SUI Annual Wage Base: $9,000

Click "Calculate Payroll" with these values to see the estimated net pay and total employer cost.