Everyone knows that a certain amount of money gets deducted automatically every pay period from your paycheck, though most people don't stop to think about all those deductions. If you live in Minnesota, you're actually subject to different tax rates depending on how much income you earn throughout the year. In order to figure your paycheck deductions, you need to know you're actually paying four different kinds of taxes every pay period, and you need to know which Minnesota tax rate you're currently being charged.
Find out your gross pay for every pay period (this is how much you make before they take anything out). Multiply your hourly pay times the number of hours you work every pay period. For example, if you get paid $10 an hour, work 40 hours a week and get paid twice a month, it would be $10 x 80 = $800. Write this number down; you'll need it to figure out your taxes. If you work on salary, just write down what your gross pay is every month before any deductions.
Look up what federal tax bracket you're in (see Resources). Your tax bracket is based on your income and your filing status (married, single or head of household), and it doesn't matter what state you live in. Multiply your gross pay by your tax bracket percentage (for example: $800 x 15% = $120). This is how much gets taken out of your check for federal income tax.
Figure out what you owe for Federal Insurance Contributions Act (FICA) taxes. This is actually two taxes--Social Security and Medicare. To figure out your paycheck FICA deduction, multiply your gross pay by 7.65 percent. Add this number to the federal tax you deducted in Step 2.
Find your year-to-date income on your pay stub and use the charts below to find out what percentage they're deducting for Minnesota state taxes. Multiply that percentage by your gross wages to see how much is being taken from each paycheck. Add this number to the federal and FICA deductions you already figured out.
If you've made a total of $22,730 or less so far this year, they'll be taking out 5.35 percent of your gross income. If you've made a total between $22,731 and $74,650, they're taking out 7.05 percent. And if you've made over $74,651 so far this year, they're taking out 7.85 percent.
Married Couples Filing Jointly:
If you've made a total of $33,220 or less so far this year, they'll be taking out 5.35 percent of your gross income. If you've made a total between $33,221 and $131,970, they're taking out 7.05 percent. And if you've made over $131,971 so far this year, they're taking out 7.85 percent.
Don't forget to account for any additional money they deduct from your paycheck, like contributions to your retirement fund or health care coverage.