Plenty of small employers run payroll in Excel or Google Sheets, and nothing in federal law stops them. The Department of Labor's Fact Sheet #21 says no particular form is required for payroll records, only that they are accurate and complete. Below is a free layout you can copy column for column, then the mistakes that most often make a spreadsheet wrong.
The free payroll spreadsheet template
Use one tab per employee and one row per payday. These columns cover what the Department of Labor asks you to record for nonexempt workers and what the IRS asks you to keep for employment taxes.
| Column | What goes in it | How it's worked out |
|---|---|---|
| A. Pay period start and end | The dates the pay covers | Typed |
| B. Pay date | The day the employee is paid | Typed |
| C. Regular hours, D. Overtime hours | Hours worked in the workweek | From time records |
| E. Hourly rate | The regular rate | Typed |
| F. Gross pay | Regular plus overtime pay | C × E + D × E × 1.5 |
| G. Federal income tax | Withholding from Form W-4 | From the IRS withholding tables |
| H. Social Security | 6.2% employee share | 6.2% of F, only until year-to-date wages reach $184,500 |
| I. Medicare | 1.45% employee share | 1.45% of F |
| J. State and local tax | Per your state's tables | From the state's method |
| K. Other deductions | Benefits, garnishments | Typed, with the employee's written authorization where required |
| L. Net pay | What the employee receives | F − G − H − I − J − K |
| M. Year-to-date gross, tax and net | Running totals | This row plus the row above |
| N. Employer Social Security, Medicare, FUTA | Your share | 6.2%, 1.45%, and FUTA on the first $7,000 |
Add a second tab for the employer side: each tax deposit's date and amount, because Publication 15 lists deposit dates and amounts among the records you keep. The 2026 rates come from Publication 15: Social Security 6.2% each for employer and employee on wages up to $184,500, Medicare 1.45% each with no limit, and FUTA 6.0% on the first $7,000, reduced by a credit of up to 5.4% for state unemployment tax.
Can you do payroll in a spreadsheet?
Yes, legally and practically, for a small payroll. Fact Sheet #21 says the law requires no particular form of records, and employers may use any timekeeping method that is complete and accurate. What the spreadsheet doesn't do is pay the tax: Publication 15 says all federal tax deposits must be made by electronic funds transfer, and you still file Form 941 each quarter and Forms W-2 at year end.
Where a spreadsheet stops making sense is when the calculations multiply: several states, tips, benefits with different tax treatment, or more people than you can check by hand each payday.
Six mistakes a payroll spreadsheet causes
- Year-to-date totals that don't carry forward. One overwritten row and every later stub, and the W-2, is off. Make the year-to-date columns formulas that add the row above, never typed numbers.
- No Social Security cap. Social Security stops once 2026 wages reach $184,500. A plain "6.2% of gross" formula keeps withholding after that.
- No FUTA cap. FUTA applies to the first $7,000 of each employee's wages in the year; a formula that charges it on every payday overstates your cost.
- Overtime on the wrong rate. Overtime is 1.5 times the regular rate, and Fact Sheet #56A says the regular rate includes all pay for the work, so nondiscretionary bonuses count, not just the hourly wage. Our post on how to calculate overtime covers it.
- Last year's withholding tables. The IRS updates the income tax withholding tables each year, and a sheet copied from last January uses old brackets.
- Records that disappear. Publication 15 says to keep employment tax records for at least 4 years, and the Department of Labor asks for 3 years of payroll records and 2 years of time cards. A single file on one laptop isn't that.
A worked example row
An employee paid $20 an hour works 40 regular hours and 5 overtime hours in a weekly period. Gross pay is 40 × $20 + 5 × $30 = $950. Social Security is $58.90 and Medicare $13.78 (rounded to the cent). With $60 of federal income tax from the withholding tables and no state tax or other deductions, net pay is $817.32. Your own share for the row is the same $58.90 and $13.78, plus FUTA while the employee's year-to-date wages are under $7,000.
Turning the spreadsheet into a pay stub
The Department of Labor's FLSA FAQ says federal law doesn't require pay stubs, but many states require a pay statement each payday. Emailing a screenshot of a spreadsheet row usually isn't what a state means: the statement needs the employer's details, the period, the hours, gross pay, each deduction and net pay in a form the employee can keep. Our guide to pay stub requirements by state lists each state's rule.
Where PayDocs fits
Keep the spreadsheet as your record, and use PayDocs for the document the employee gets. You enter the row's figures (period, pay date, hours, rate and deductions) and the pay stub carries the year-to-date totals forward. PayDocs works out federal income tax, Social Security, Medicare and supported state taxes for 2026 pay dates (see what we calculate). Every line is editable, and the preview is free.
PayDocs doesn't deposit tax or file Form 941. This is general information, not tax advice.
Questions
Can you do payroll in a spreadsheet?
Yes. The Department of Labor says no particular form of payroll record is required, only accurate and complete records. You still deposit taxes electronically, file Form 941 and issue W-2s.
What columns does a payroll spreadsheet need?
Pay period and pay date, hours, rate, gross pay, each tax withheld, other deductions, net pay, year-to-date totals, and the employer's Social Security, Medicare and FUTA, plus a separate tab for tax deposits.
What is the most common payroll spreadsheet mistake?
Year-to-date totals that break, often because a row was typed over. Close behind: withholding Social Security after 2026 wages pass $184,500, and charging FUTA beyond each employee's first $7,000.
How long should I keep payroll spreadsheets?
At least 4 years for IRS employment tax records. The Department of Labor asks for 3 years of payroll records and 2 years of time cards and wage rate tables.
Is a spreadsheet row a pay stub?
Not usually. Where a state requires a pay statement, it expects the employer's details, the period, hours, gross pay, deductions and net pay in a form the employee can keep.
Sources
- U.S. Department of Labor: Fact Sheet #21, Recordkeeping Requirements under the FLSA
- IRS: Publication 15 (2026), Employer's Tax Guide
- U.S. Department of Labor: Questions and answers about the FLSA
- U.S. Department of Labor: Fact Sheet #56A, Overview of the Regular Rate of Pay under the FLSA
Sources checked October 8, 2026. This article explains how pay documents work; it is not tax or legal advice.
