Step 2: Calculate Employee Tax Withholdings Once you have identified your employees’ gross wages, you can now determine the amount you need to deduct to pay their taxes. In most states, employers should withhold different tax forms, including federal, state, and FICA taxes, from every paycheck...
Each exemption drives down the amount of tax you can deduct from an employee’s paycheck. You can find filing status and withholding allowance details on IRS Form W-4, Employee’s Withholding Allowance Certificate, which an employee must complete and submit to you upon starting work at your ...