Warm Up: What are the federal taxes that taken out of your pay check used for? What other taxes are taken out of your paycheck?
Payroll and tax activity Fill out your W-4 to determine the number of exemptions you will claim on your earnings. Some helpful Complete your Pay Stub with all of the information requested. Personal information, federal, medicare, social security and state taxes. You will need your annual salary for this activity and to know that you are paid bi-monthly or two times per month. Annual salary / # of pay periods Federal Tax Calculation Example: Determine tax, take-home income, and effective tax rate for $200,000 # Range Money in Bracket Tax rate Tax Paid 1 $0-$9,700 $9,700 10% $970 2 $9,701-39,474 $29,773 12% $3,572.76 3 $39,475-84,199 $44,724 22% $9,839.28 4 $84,200-160,724 $76,524 24% $18,365.76 5 $160,725-204,099 $39,275/ $43,374 32% $12,568 Total Tax Paid: $45,315.80 Cumulative Tax rate: 22.65% $45,315.80/$200,000 Example: Monthly gross pay: $4,707 Subtract any W-4 allowances (2): ($667) Adjusted wage: $4,040 From % withholding table(p22) ($192) $3,848 This is your Colorado taxable income Multiply by 4.63% x .0463 $178.16 Actual amount of withholding per month
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