In these situations, the regular rate is calculated using the weighted average of the two rates. SDI also provides California’s Paid Family Leave program. California has state laws on overtime, so you should work any payments out with a California overtime calculator. To calculate Medicare withholding on a paycheck that includes overtime pay, multiply .0145 by the gross pay, or the combined regular and overtime wage amounts. The important thing to remember is that the regular rate can be complicated by many factors, especially where employees receive multiple types of compensation for a given pay period. Therefore, you will not be responsible for paying it. How to Calculate Overtime Pay in California, More than 40 hours worked in a workweek; and. Here’s a quick overview of what you need to know when you’re calculating federal payroll taxes. This is similar to the federal income tax system. California has a progressive income tax, which means rates are lower for lower earners and higher for higher earners. Below, we cover some of the trickier California-specific overtime scenarios. The overtime tax rate for 2018 is the same as the regular tax rate for 2018 at every wage level and for every type of reporting status. Please adjust your . In California, tipped employees such as waitresses, bartenders, and busboys also have to factor their earned tips into their total wages, as well as any tip credits claimed by their employer against their cash wages. When calculating your take-home pay, the first thing to come out of your earnings are FICA taxes for Social Security and Medicare. (2) flat-sum bonus overtime premium:  $60/40 = $1.50 * 1.5 * 2 overtime hours = $3.00. So what makes California’s payroll system different from the systems you might have encountered in other states? To figure out your California payroll withholding and federal payroll taxes, just enter wage and W-4 allowances for each employee below. Overtime Calculator Usage Instructions Enter your normal houlry rate, how many hours hou work each pay period, your overtime multiplier, overtime hours worked and tax rate to figure out what your overtime hourly rate is and what your paycheck will be after income taxes are deducted. Bonuses and earnings from stock options are taxed at a flat rate of 10.23%, while all other supplemental wages are taxed at a flat rate of 6.6%. You can use our California payroll calculator to figure out your employees’ federal withholding as well as any additional taxes you are responsible for paying as the employer. Your employer matches the 6.2% Social Security tax and the 1.45% Medicare tax in order to make up the full FICA taxes requirements. Figuring out how to pay employees can be a huge hassle, but our payroll calculator simplifies the process so you can spend more time focusing on making your small business the best it can be. Federal labor law requires overtime hours be paid at 1.5 times the normal hourly rate. Our calculator will calculate gross pay, take out deductions, and come up with the net pay you’ll need for writing your employees’ paychecks. But don’t relax just yet; it gets harder. The employee will owe state and federal taxes on the whole amount for the pay period, but a paycheck calculator won't distinguish between the earnings on the first 40 hours for each week and the higher earnings on the hours worked once the employee has crossed this threshold. This guide includes instructions for calculating taxes using either a percentage method or by use of tables made up of columns corresponding to the withholding allowances claimed on that employee's W-4 withholding form, as well as the employee's individual filing status, such as married or single. When more than one overtime rate could apply, overtime hours must be compensated at whichever overtime rate is higher. First, we calculated the semi-monthly paycheck for a single individual with two personal allowances. If you want to take some of the administrative burdens off your shoulders, there are a number of terrific payroll software companies that can do all the heavy lifting for you. (Luckily, there is a deduction for the part of FICA taxes that your employer would normally pay.). Find the line on the appropriate page and column and locate the line for that employee's gross wages, or the combined total of regular and overtime pay. The content on this blog is "as is" and carries no warranties. California is one of the few states to require deductions for disability insurance. According to the Small Business Association, 99.2% of businesses in California are classified as “small businesses.” Whether you run an ice cream stand along the boardwalk or the tiny startup that will one day change the world, there’s one thing all California small business owners have in common: payroll taxes.