Determine each employee’s gross wages for the pay period
Identify taxable wages for each tax type
Apply federal income tax withholding based on Form W-4 and IRS withholding tables
Apply Social Security tax at the current employee rate to wages up to the annual wage base
Apply Medicare tax at the current employee rate to all Medicare wages
Apply Additional Medicare Tax to wages above the threshold, if applicable
Apply federal unemployment tax to employer taxable wages, if applicable
Apply state income tax withholding, if applicable
Apply state unemployment tax to employer taxable wages, if applicable
Apply any local payroll taxes, if applicable
Add employee tax withholdings to determine total employee payroll taxes
Add employer payroll taxes to determine total employer payroll taxes
Subtract employee taxes and other deductions from gross wages to calculate net pay
Remit withheld taxes and employer taxes to the appropriate tax agencies by the required deadlines
Keep payroll records and tax filings for compliance and reporting