• Money
    • Budget
    • Shop
    • Travel
    • Stories
  • Career
    • Advice
    • Entrepreneurship
    • Freelance
    • Small Business
  • Investing
    • General
    • IRA + 401K
    • Stocks + Bonds
    • Retirement Planning
    • Estate
  • The Basics
    • Student Loans
    • Credit Cards
    • Debt
    • Taxes
    • More
  1. Home
  2. The Basics
  3. Taxes
  4. How to Calculate Salary Taxes In Colorado

How to Calculate Salary Taxes In Colorado

November 11, 2009
By: Pamela Gardapee
  • Share
  • Share on Facebook

Salaried employees must pay federal, state, social security and Medicare taxes on their gross earning every pay period. When you start a job, you are given a W-4 to fill out that your employer uses to calculate salary taxes. The W-4 will tell the employer how many allowances you are claiming. In Colorado, the state and federal taxes are figured after any pre-tax deductions if the employee contributes to a 401K or other qualifying fund. To find out what the net pay would be, an employer follows these guidelines for calculating tax liability.

No Pre-Tax Deductions

Step

Calculate Medicare taxes, which is 1.45 percent (.0145) of the employee's gross earnings. For instance, if your gross salary is $1,200, the employer will take 1,200 x .0145 = $17.40.

Step

Figure the social security tax, which is 6.2 percent (.062) of the employee's gross earnings. For social security, the employer will take 1,200 x .062 = 74.40.

Step

Calculate the federal taxes by using the IRS Publication 15-T, which is the withholding table for figuring federal tax liability. Since there are no pre-tax deductions, the entire gross pay is subject to tax. For this instance, the employee has no federal allowance and is single. Find the table in the publication for a single person receiving salary. Find the gross amount in the table with zero allowances and the tax liability is $132.38.

Video of the Day

Step

Figure the Colorado state tax liability by using 4.63 percent (.0463) of the federal tax liability. For this example, it will be 1,200 x .0463 = 55.56.

Step

Subtract the calculations from the gross pay to determine net pay. For this example, take 1.200 (gross) – 17.40 (Medicare) – 74.40 (social security) – 132.38 (federal) – 55.56 (state) = 920.26 (net).

With Pre-Tax Deductions

Step

Calculate Medicare taxes, which is 1.45 percent (.0145) of the employee's gross earnings. For instance, if your gross salary is $1,200, the employer will take 1,200 x .0145 = $17.40. Note: Medicare is taxed on the gross before any pre-tax deductions.

Step

Figure the social security tax, which is 6.2 percent (.062) of the employee's gross earnings. For social security, the employer will take 1,200 x .062 = 74.40. Note: Social security is taxed on the gross before any pre-tax deductions.

Step

Calculate the federal taxes by using the IRS Publication 15-T, which is the withholding table for figuring federal tax liability. Because the employee contributes $50 a pay day to a 401K, the federal tax is figured like this: 1,200 – 50 = 1,150. Find the table for a single salaried person with no allowances, which is 124.88.

Step

Figure the Colorado state tax liability by using 4.63 percent (.0463) of the federal tax liability. The federal gross is $1,150 because of the pre-tax deduction. The state tax is figure like this: 1,150 x .0463 = 53.25.

Step

Subtract the calculations from the gross pay to determine net pay. For this example, take 1.200 (gross) – 50 (pre-tax) – 17.40 (Medicare) – 74.40 (social security) – 124.88 (federal) – 53.25 (state) = 880.07 (net).

Show Comments

Related Articles

How Much Taxes are Withheld out of a Paycheck in Kentucky?

How Much Taxes are Withheld out of a Paycheck in Kentucky?

The Basics
Taxes
By: Bonnie Conrad
Is My 401(k) Tax Deductible?

Is My 401(k) Tax Deductible?

The Basics
Taxes
By: Fraser Sherman

PARTNER CONTENT

4 Habits That Helped Me Stop Scraping By

4 Habits That Helped Me Stop Scraping By

How to Read IRS Form W2

How to Read IRS Form W2

The Basics
Taxes
By: eHow Contributor
The Average Salary of an Aquatic Vet

The Average Salary of an Aquatic Vet

Investing
General
By: Dirk Huds
How to Calculate Taxes on a Bonus

How to Calculate Taxes on a Bonus

The Basics
Taxes
By: Michael Keenan

Get Weekly Savings& Finance Tips.

  • Money
  • Career
  • Investing
  • The Basics
  • About
  • Contact Us
  • Terms
  • Privacy Policy
  • Copyright Policy
© 2018 Leaf Group Ltd. Leaf Group Media

Get Weekly Savings
& Finance Tips.

Money Made Easier.

Please enter a valid email.