Navigating the intricacies of payroll—be it deductions, taxes, or benefits—is a crucial task for any HR professional or payroll manager, oftengo ...
Massachusetts Paycheck Calculator
Use Massachusetts Paycheck Calculator to estimate net or “take home” pay for salaried employees. Simply input salary details, benefits and deductions, and any other necessary information as prompted below, and let our tool handle the rest.
Where are you employed?
How much do you get paid annual?
How often are you paid?
What is your federal filing status?
Children under 17 and students under 24
All other dependents
Where do you live?
Benefits and Deductions
Federal Income Tax
Alabama State Tax
What Are Payroll Taxes?
Payroll taxes withheld from employee paychecks fund Social Security and Medicare, to which the employer also makes payroll tax contributions.
The Social Security tax is paid by both the employee and the employer at a rate of 6.2% of the employee’s wages. The Medicare tax is also paid by both employee and employer, but at a rate of 1.45%.
Employers are also required to pay taxes under the Federal Unemployment Tax Act (FUTA) and the State Unemployment Tax Act (SUTA). The employer must also collect federal income tax from employee paychecks, and pay that amount to the IRS. The rate is determined by the employee’s tax bracket.
Each state also has specific state payroll taxes that must be withheld and paid.
Massachusetts Payroll Taxes
There are two Massachusetts employer payroll taxes to keep track of in addition to Social Security and Medicare.
Employers contribute to a state unemployment tax account (SUTA) and employees pay state income tax.
Under SUTA, companies must contribute a portion of payroll taxes to the state’s unemployment program, which pays out benefits to the unemployed until they find a new job or the predetermined benefit runs out.
In Massachusetts, SUTA is paid on the first $15,000 of annual employee income, as of 2022.
The new employer SUTA rate is 2.42% for non-construction companies and 6.72% for construction companies. For established companies, rates, as stated on the Massachusetts Department of Unemployment Insurance website, are calculated as follows:
“After the first 3 years at a new employer rate, the Department of Unemployment Assistance (DUA) calculates an experience rating based on the reserve ratio method:
- A reserve percentage is calculated by dividing the employer’s account balance by the 3-year wage average (subject to UI tax).
- The reserve percentage is applied to the annual rate schedule currently in effect, and the experience rate is determined for the coming year.
UI contributions owed are based on wages paid.”
Find more information on the Massachusetts Department of Unemployment Insurance website.
State Income Tax
The Massachusetts state income tax withholding rate is 5%, as detailed on the Massachusetts Department of Revenue website.
Paying Payroll Taxes
Just as you need an EIN to pay federal payroll taxes, in Massachusetts, you’ll need to register for state withholdings with the Department of Revenue, and for SUTA taxes, with the Department of Unemployment Assistance.
To pay these taxes you’ll simply log into these accounts. Withholding taxes are due monthly or annually, depending on the total withheld. SUTA taxes are due quarterly.
Your municipality may also require certain tax registrations, so be sure to check with your local government for requirements.
Using a Payroll Tax Service
In Massachusetts, payroll and payroll taxes come with countless laws and restrictions, which is why many business owners turn to a payroll service provider to ensure their business remains fully compliant. It’s usually less expensive than creating a new staff position for managing payroll, and relatively easy.
You’ll just send over your digital timesheets and relevant information and the service provider will take care of the calculations, payments and taxes, freeing you up to focus on growing your business.
We highly recommend hiring a payroll service — as a busy entrepreneur, you won’t regret it!