Determine the employee’s gross wages for the pay period
Identify the employee’s tax filing status and withholding allowances or W-4 details
Calculate federal income tax withholding using IRS withholding tables or payroll software
Calculate Social Security tax withholding at the current employee rate, up to the wage base limit
Calculate Medicare tax withholding at the current employee rate, with no wage base limit
Calculate any additional Medicare tax if the employee’s wages exceed the threshold
Calculate state income tax withholding if applicable
Calculate local income tax withholding if applicable
Withhold any pre-tax deductions that affect taxable wages, such as retirement or health plan contributions
Subtract all employee tax withholdings and deductions from gross wages to get net pay
Remit withheld taxes to the appropriate federal, state, and local agencies by the required deadlines
File required payroll tax forms on the required schedule
Reconcile payroll records regularly to ensure correct tax calculations and payments