how to calculate payroll
1 determine the employee s gross pay before you can begin to calculate payroll you must know what the employee s gross income is this is determined by multiplying the number of hours worked in a pay period by the hourly rate apply federal and state income taxes you ll use the tax tables that you ve retrieved to apply the correct amount of federal and state income tax to withhold for federal taxes you ll look up the withholding amount based on the employee s gross pay filing status and the number of exemptions claimed