This is for a small US employer with one to a few employees who wants to run payroll by hand, with a spreadsheet and the IRS tables, instead of paying for a payroll service. It walks through one paycheck from gross to net with real 2026 figures, then the deposits and filings that come after. Our guide to doing payroll for a small business covers the setup (EIN, state registration, new-hire forms); this post is the calculation itself.
Before the first payday
You need four things in place before you can calculate anything. IRS Publication 15 asks each new employee to complete the 2026 Form W-4, and you verify they can work in the US with Form I-9.
- An employer identification number (EIN) and an account to make federal tax deposits electronically. Publication 15 says all federal tax deposits must be made by electronic funds transfer, through EFTPS, IRS Direct Pay or your IRS business tax account.
- The employee's Form W-4, which drives federal income tax withholding.
- A report to your state's new-hire registry. Publication 15 notes that all 50 states have one.
- Your state's withholding and unemployment accounts, if your state has income tax or you owe state unemployment tax.
Payroll calendar: 2026 paydays and deposit dates SUTA tax explained
How to run payroll manually: the steps for each payday
Each payday follows the same order. Do it the same way every time and keep the working, because that working is your payroll record.
- Work out gross pay: hours times the hourly rate, including any overtime, or the salary for the period, plus any bonus or commission.
- Take off any pre-tax deductions the employee has signed up for to get federal taxable wages.
- Work out federal income tax withholding from the W-4 and the Publication 15-T tables (example below).
- Withhold Social Security at 6.2% and Medicare at 1.45% of gross wages subject to them. Social Security stops once the employee's 2026 wages pass $184,500; withhold an extra 0.9% Medicare on wages above $200,000 in the year.
- Work out state and local income tax with your state's tables, and any state-specific employee deductions.
- Subtract everything from gross pay to get net pay, and pay it.
- Give the employee a pay stub showing each line, and record your employer share: 6.2% Social Security, 1.45% Medicare and federal unemployment tax.
A worked example with the 2026 tables
Say you pay an employee $2,000 every two weeks (26 paydays a year). They gave you a 2026 Form W-4 with "Single" checked, nothing in Steps 2 to 4, and they have no pre-tax deductions. Publication 15-T's Worksheet 1A, for automated payroll systems, gives the federal figure.
- Annualise the wages: $2,000 × 26 = $52,000.
- Line 1g of Worksheet 1A subtracts $8,600 for a filer who isn't married filing jointly and didn't check Step 2: $52,000 − $8,600 = $43,400 adjusted annual wage.
- In the 2026 annual standard table for single filers, $43,400 falls in the $19,900 to $57,900 row: $1,240 plus 12% of the amount over $19,900. That is $1,240 + $2,820 = $4,060 for the year.
- Divide by 26 paydays: $156.15 of federal income tax for this paycheck.
- Social Security: 6.2% × $2,000 = $124.00. Medicare: 1.45% × $2,000 = $29.00.
| Line | Amount |
|---|---|
| Gross pay | $2,000.00 |
| Federal income tax (Pub. 15-T, Worksheet 1A) | −$156.15 |
| Social Security (6.2%) | −$124.00 |
| Medicare (1.45%) | −$29.00 |
| Net pay before state tax | $1,690.85 |
| Employer Social Security and Medicare (your cost) | $153.00 |
Publication 15-T also has wage bracket tables if you prefer to look the figure up by pay range. They give a close result; the percentage method above is exact. Check the arithmetic against a paycheck calculator before you pay, then add your state's withholding.
Depositing the taxes
The withheld tax and your employer share go to the IRS on a deposit schedule. Publication 15 sets it from a lookback period of July 1 to June 30: for 2026, July 1, 2024 to June 30, 2025.
| Situation | When to deposit |
|---|---|
| $50,000 or less of taxes in the lookback period (or a new employer) | Monthly: by the 15th of the following month |
| More than $50,000 in the lookback period | Semiweekly: Wednesday to Friday paydays by the following Wednesday; Saturday to Tuesday paydays by the following Friday |
| Less than $2,500 of tax for the current or prior quarter | You may pay with a timely filed Form 941 instead |
| $100,000 or more accumulated on any day | By the next business day, whatever your schedule |
Most one- and two-employee businesses are monthly depositors. Federal unemployment tax (FUTA) is separate: 6.0% on the first $7,000 of each employee's wages, reduced by up to 5.4% of credit for state unemployment tax paid, and deposited once the liability for a quarter is over $500.
Filings: quarterly and at year end
- Form 941 each quarter, by April 30, July 31, October 31 and January 31, reporting wages, the tax withheld and both shares of Social Security and Medicare.
- Form 940 for federal unemployment tax, once a year.
- Form W-2 for each employee and Form W-3 to the Social Security Administration; for 2026 wages these are due February 1, 2027, because January 31 is a Sunday.
- Your state's withholding and unemployment returns, on the state's schedule.
Publication 15 says to keep all employment tax records for at least four years. That means each W-4, the pay working for each payday, deposit confirmations and copies of every return.
When DIY payroll stops being worth it
Doing it yourself works while you have few employees, one state and a regular schedule. It gets harder with employees in several states, tips, garnishments, frequent bonuses or a semiweekly deposit schedule, because each adds rules and deadlines. If you miss deposits or file late, penalties and interest apply, so be honest about whether you will keep up every payday.
Where PayDocs fits
PayDocs isn't a payroll service: it doesn't pay employees, deposit taxes or file returns. When you run payroll yourself, it turns your figures into a clear pay stub for each payday, with every line from the table above and year-to-date totals, and W-2 employee copies at year end. PayDocs works out federal income tax, Social Security, Medicare and supported state taxes for 2026 pay dates (see what we calculate). Every line stays editable, so the stub matches what you actually withheld. Previewing is free; a PDF is $4.99 per pay stub once checkout opens.
This is general information about US federal rules as of 8 October 2026, not tax or legal advice. State rules add to it; check your state's labor and revenue departments.
Questions
How do you run payroll manually?
For each payday, total gross pay, subtract pre-tax deductions, work out federal income tax from the W-4 and Publication 15-T, withhold 6.2% Social Security and 1.45% Medicare, add state tax, pay the net amount, deposit the taxes and give a pay stub.
How much federal tax comes out of a $2,000 biweekly paycheck?
For a single filer with a 2026 Form W-4 and no adjustments, Publication 15-T's percentage method gives $156.15 of federal income tax, plus $124.00 Social Security and $29.00 Medicare, before any state tax.
When do you deposit payroll taxes?
Most small employers are monthly depositors: taxes on wages paid in a month are due by the 15th of the next month. Employers with more than $50,000 in the lookback period deposit semiweekly. Deposits must be made electronically.
Which forms do you file when you do payroll yourself?
Form 941 every quarter, Form 940 once a year, and Forms W-2 and W-3 after the year ends (February 1, 2027 for 2026 wages), plus your state's withholding and unemployment returns.
How long do you keep payroll records?
IRS Publication 15 says to keep all employment tax records for at least four years. Federal wage-and-hour rules separately require payroll records for at least three years.
Sources
- IRS: Publication 15 (2026), Employer's Tax Guide
- IRS: Publication 15-T (2026), Federal Income Tax Withholding Methods
Sources checked October 8, 2026. This article explains how pay documents work; it is not tax or legal advice.
