How to Use the Payroll Deductions Template (continuation)
Column H – Withholding Tax on Income -- Manually input the corresponding withholding tax by referring to the withholding tax amount opposite the gross wages and under the number of tax allowances claimed, as tabularized in the appropriate Wage Bracket Table.
The example provided in the downloadable payroll worksheet template is for a single employee claiming one (1) tax allowance; hence the correct amount of income tax withheld is $345. (Click on the image on your left to view a larger screenshot image of the Monthly Wage Bracket Table for single employees).
Column I FICA SSS Tax – Under this column, the employee’s social security tax is automatically computed for each cell, once you input the employee’s gross salary.
Column J FICA Medicare Tax -- The employee’s Medicare tax is automatically computed for each cell under this column, similar to that of the SS tax.
Column K State Tax – This column is for mandatory state withholding tax, if any. The state tax example in our payroll deduction worksheet is based on Colorado’s Occupational Privilege Tax. It requires a $2 tax deduction per month from all individuals deriving gross earnings of $250 or more while working within the city limits of Aurora, CO. To check if your state is currently imposing a similar tax on gross income earned by your employees, visit the directory of state and local tax contents provided by Payroll .com.
Column L – Other Deductions – These are post-tax deductions, usually those deductions taken from the employee’s salary as payment for retirement fund contributions, union dues, uniforms, additional insurance costs, repayments on advances or loans, and the like, which form part of the employee’s wages and therefore are still subject to tax.
Use the Payroll Deduction form submitted by your employee, which serves as your authorization and reference guide. For more information about post tax deductions, readers may refer to a separate article entitled “Which Payroll Deductions are Taxable?"
Column M – Total Deductions – The cells under this column are automatically generated by the effect of the autosum function for the cell inputs under Columns H, I, J K and L. In case you need to add more deductions to the payroll template, be sure to insert the new column before the Total Deductions. That way, the amounts of the new deductions will be included among the inputs that are automatically calculated.
Column N – Net Pay- The amount under this column is automatically generated by the formula integrated in each cell, wherein Gross Salary (Column F) is reduced by the Total Deductions (Column M).