Determine gross wages for each employee
Identify taxable wages for each tax type
Calculate federal income tax withholding using the employee’s Form W-4 and IRS withholding tables or payroll software
Calculate Social Security tax by multiplying taxable wages by the employee rate
Calculate Medicare tax by multiplying taxable wages by the employee rate
Add Additional Medicare tax for wages above the threshold, if applicable
Calculate federal unemployment tax on the employer’s taxable wages
Calculate state income tax withholding, if applicable
Calculate state unemployment tax on the employer’s taxable wages, if applicable
Add any local payroll taxes, if applicable
Include pre-tax deductions that reduce taxable wages
Include post-tax deductions separately, if applicable
Sum all employee taxes withheld
Sum all employer payroll taxes owed
Subtract employee withholdings from gross pay to get net pay
Remit withheld taxes and employer taxes to the appropriate tax agencies on the required schedule