How to Calculate Your Monthly Federal Taxes Owed on Personal Income

When you work as an employee, your employer is required to withhold payroll taxes and income tax from your paycheck. Payroll taxes include Medicare taxes and Social Security taxes, which are flat taxes, so the tax rate does not change depending on your total income. Your income tax withholding depends on how many allowances you claimed on your W-4 form, your filing status and how much income you have. Since the income tax is a progressive tax, you will have a higher percentage withheld as your income increases.

Multiply your monthly pay by 0.0145 to calculate the amount of Medicare taxes that will be withheld from your paycheck. For example, if your monthly income is $4,000, you would have $58 withheld for Medicare taxes.

Multiply your monthly income by 0.062 to calculate that amount of Social Security taxes that will be withheld. For example, if you have $4,000 in monthly income, you would have $248 withheld from your paycheck for Social Security taxes.

Multiply the number of allowances you claimed on your W-4 by the monthly value of each allowance. For 2010, the monthly value of each allowance equals $304.17 so if you claimed two allowances you would get $608.34.

Subtract the value of your allowances from your monthly salary. For example, if your monthly pay equals $4,000 and your allowances equal $608.34, you would get $3,391.66.

Use the federal income tax withholding table 4 to determine how much will be withheld from your monthly paycheck for income taxes based on your after-allowance earnings and your filing status. For example, for 2010 if you are single and your monthly income is $4,000, you would have $605.75 withheld for income taxes.

Total the results from the previous steps to determine the total federal taxes that will be withheld from your monthly paycheck.