Oklahoma Panhandle State University
How To Use the Tax Calculator Excel Workbook
The Tax Calculator Excel workbook (tax calcutor.xls) is provided to assist employees and administrators/supervisors with ‘what if’ scenarios concerning employee changes in pay or withholding. The most reliable information to start with is an employee’s current Payroll Advice. Once the information on the Payroll Advice is entered into the Input Sheet worksheet, the social security and medicare, as well as federal and state income taxes (see the Calculation Results section on the Input Sheet) and net pay should agree to the Payroll Advice amounts within one or two cents. If these amounts do not agree, the amounts entered into the Input Sheet should be verified they agree to the Payroll Advice and are entered into the correct section (Excepted from Taxes or Not Excepted from Taxes). Only after the results in the Tax Calculator workbook agree to the amounts on the Payroll Advice can ‘what if’ scenarios be reliably reviewed.
The tax calculator workbook does not calculate deductions. If a pay change is being reviewed, the user must be aware of which deductions are based on pay and make applicable changes in those deductions. Also, some deductions can be tax-sheltered (Excepted from Taxes) or not tax-sheltered (Not Excepted from Taxes). The user must enter the deductions into the appropriate workbook sections in order to achieve reliable results. For this reason, it is always preferable to start with and match a known, correct pay calculation, such as the pay calculation printed on a Payroll Advice. Input cells are provided and labeled for some of the more common payroll deductions. Extra input cells are provided for deductions other than those listed. Again, be sure to enter the deduction amounts within the correct section of the Input Sheet worksheet.
University-paid benefits are not included in the tax calculator workbook. Since the intent of the tax calculator workbook is to provide information on how taxes and/or net pay will change if different withholding scenarios are elected or an employee’s pay rate changes, university-paid benefits are not included, since they generally do not affect taxes or net pay. Exceptions are the Imputed Taxable Benefit of Group Term Life Insurance in Excess of $50,000 and benefits specifically determined by the Internal Revenue Service to be taxable. Since these taxable benefits do increase an employee’s taxable gross, the Input Sheet worksheet is designed to accept them as input. The Imputed Taxable Benefit of Group Term Life Insurance in Excess of $50,000 is determined by an IRS table based on the employee’s age at December 31 of the current tax year and the level of life insurance coverage above $50,000. By entering the employee’s age and life insurance coverage, the workbook will calculate the applicable taxable benefit.
Once the pay data is entered into the Input Sheet worksheet and the tax amounts and net pay in the Calculation Results section agree to the information on the payroll advice, changes can be made within the Input Sheet, such as with federal and state income tax marital status, and the results observed in the Calculation Results section.