An online payroll calculator is a quick and convenient way for you to estimate, or confirm a paycheck. You can use one if you are an employee, business owner, or a manager trying to figure out the correct withholdings.

Sometimes all you need is a quick calculator to figure out this information. A full-blown accounting software package is overkill for this function. Plus, it is an expensive option if you are primarily using it for calculating payroll.

Any payroll calculator should be designed for ease of use. However, just because it is easy to use, doesn’t mean it is OK to be inaccurate. A calculator with old tax rates will give you bad results. This could spell trouble if you are relying on it when reporting to the government. Mistakes could cost money. If it underreports your taxes, there will most likely be fines, penalties and interest charged for these errors. Always check to make sure the online payroll calculator is updated with the most recent tax rates.

Some calculators will give you the option to figure out state as well as federal state taxes. This option saves you from having to calculate state tax payroll with a second calculator. Other features you should look for are the ability to include: marital status, number of exemptions, 401k contributions, and other non-taxable deductions.

Also look for a calculator that will allow you to choose the pay frequency (weekly, bi-weekly, monthly). It should give you the amount you have to pay for Federal tax withheld, social security tax, Medicare Tax, and State income tax withheld. One important feature any worthwhile calculator will have is the cut-off to stop withholding for Social Security tax. An employee does not have to pay Social Security tax once their income reaches a certain level. Overpaying Social Security can create some paperwork headaches for business owners. Remember accuracy is critical.

Calculating your own payroll can be done provided it is relatively simple. If you have a lot of employees, or your situation is complicated, then you should consider using a payroll service. These types of services will give you assurance the payroll is being done correctly. When it comes to taxes, it is better to be safe than sorry.

Using a calculator shouldn’t be an issue if is just to check your paycheck, or for something easy like paying a nanny. They are an inexpensive option, and can be accurate. Provided the tax tables are up-to-date. I will say it again – accuracy is critical.

One more thing you should know about an online payroll calculator. Even though these calculators are quick, convenient and many times free. They are to be considered for general guidance, and estimates. In no way are they to be used for exact calculation for taxes, or payroll. For the best results you need to consult a professional advisor, or tax specialist for your particular situation.