Payroll tax calculator

Hiring a new employee is exciting. But once you do, how much is it going to cost you? We’ll give you a quick estimate of the actual true cost of hiring an employee, and keep you ready for year-end. Enter your information below to get your estimate.

Unfortunately, this tool is not available in your region

Our Payroll tax calculator is currently available for US residents only

Calculate payroll for your hourly employees with Wave.

What is payroll tax?

Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. These taxes are imposed on employers and employees and on various compensation bases, and are collected and paid to the taxing jurisdiction by the employers.

Helpful tips

Keep your records and documents in one place so you’re prepared for tax time. Here are a few other helpful tips:

  • Employee contracts aren’t a legal requirement, but they protect your employees and your business. Contracts can outline everything from job descriptions and expected hours of work to the date of employment and salary details. A lawyer can help you draft a contract if you have any questions as to what should be included.
  • Whether you hire full-time employees, contractors or freelancers makes a big difference when it comes to payroll. Make sure you’re compensating them properly and according to the tax guidelines where your business operates.
  • Wave’s payroll software comes with worry-free features such as automatic tax remittances, direct deposits into your employees’ bank accounts and automatic payroll journal entries.
  • Got questions about payroll and taxes? Check out The Ultimate Year-end Payroll Checklist
  • Check out our other free payroll tools that can help you manage your business.

Frequently Asked Questions

How does the 30-day free trial work?

Upon processing your first payroll, you can use Wave Payroll for up to 30 days, commitment-free. At any time, you can activate to start your billing cycle and gain access to items like tax filing and approving payrolls beyond the current month. See our full US terms here, and our full Canadian terms here.

How do I migrate my data from a different payroll provider?

If you're switching to Wave mid-year, you’ll want to gather your historical payroll data so that employee tax forms and pay stubs are accurate. You can learn how to do that with this handy support article.

Can I pay independent contractors with Payroll?

You sure can! Wave Payroll supports paying both employees and independent contractors when you run payroll. The proper tax forms—1099 in the US and T4-A in Canada—are also generated for you.

What if I want to pause my payroll for a period of time?

You can deactivate your payroll account at any time by navigating to Settings > Billing > Deactivate.

Is your software actually free?

Yes! Our invoicing, accounting, and US-only banking software is 100% free—no trials, subscriptions, or hidden fees.

What’s the catch—how does Wave make money?

Wave makes money through our optional, paid money management products. Depending on your business needs, you can choose to pay for online payment processing, payroll, and 1:1 advisors. This allows our core software—invoicing, accounting, and business banking (currently only available to sole proprietors in the US)—to always be free.

Do I need to enter my credit card details to sign up?

Put your wallet away. You won’t need to enter a credit card unless you want to use our payroll service. Just create your account and get started for free.

Do I need to install any software?

Wave is 100% web-based, so you just need an Internet connection and browser. You can, however, download and install our mobile invoicing app for iOS and Android.

Is my data secure?

Completely. Our servers are protected physically and electronically. Any connection between you and Wave is protected by 256-bit SSL encryption. Wave is a PCI-DSS Level 1 Service Provider.

Do you provide customer support?

We provide different levels of support for customers who use different parts of Wave. Full details on how Wave support works are available here.

Why is the base price for Payroll different for some US states?

The base rate is higher in tax service states (Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin) because Wave automatically transfers tax payments and files the necessary paperwork with your state tax office and or IRS.

In self-service states (all other 36 states) Wave Payroll does not make payments or file on your behalf.

Create your business and get started with Payroll by Wave

Our payroll software makes it easy to pay yourselves, your employees and contractors accurately and on-time