How to Make Payroll in Excel in USA

This wikiHow teaches you how to calculate payroll for employees in the US using Microsoft Excel. Creating a payroll spreadsheet from scratch is an exhausting process, but luckily Microsoft has a payroll template for Excel on both Windows and Mac computers.

Table of Contents

Create payroll

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Open Payrpl Calculator website. Go to https://templates.office.com/en-us/Payrpl-calculator-TM06101177 using your computer’s web browser.

This spreadsheet is a free Excel template from Microsoft.

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Click Download . This blue button is near the bottom of the window. The template will begin downloading to your computer.

Depending on your browser, you may need to choose a save location and then click Save first before the file will download.

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Open the template. Double-click the downloaded Excel file to open the template in Excel.

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Click Enable Editing . This button is located in the yellow bar at the top of the Excel window. The Excel file will be unlocked for you to edit.

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Save document. Before you edit the template, press Ctrl + S (Windows) or ⌘ Command + S (Mac), enter a name for the file (eg “Payroll 5.12.2018”) and click Save . This is to ensure that the payroll sheet is automatically saved as a second file. Then you can start calculating the salary.

Enter employee information

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Click Employee information. The title is in the lower left corner of the Excel window. This is to ensure that you are on the Employee Information worksheet.

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Add employee name. Enter the employee’s name in the first blank box in the “Name” column.

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Enter the hourly rate. Enter the amount this employee is paid by the hour in the first blank box of the “Hourly Wage” column.

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Enter employee tax information. Make sure you have your employee’s tax information, then fill in the box below the following headings:

Tax Status – Tax status. This number (usually “1”) is shown on the employee’s W-2.
Federal Allowance – Federal allowance. This is the number that identifies the employee’s tax bracket and is usually shown on the W-4.
State Tax (Percentage) – Your state’s taxable percentage.
Federal Income Tax (Percentage) – The percentage of federal income tax under the employee tax bracket.
Social Security Tax (Percentage) – Current Social Security tax percentage.
Medicare Tax (Percentage) – The current U.S. government percentage of Medicare taxes on care for seniors over 65.
Total Taxes Withheld (Percentage) – Percentage of total tax withheld. This field will be calculated automatically after you fill in other tax fields.

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Determine employee deductions. This will depend on the employee’s benefits, investments, etc.:

Insurance Deduction (Dplars) – Insurance deductible. This is the dollar amount you keep for insurance.
Other Regular Deduction (Dplars) – Other regular deductions or kickbacks of any money you keep.

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More employee information. After all employees have been added, you can proceed to calculate the salary.

Payroll calculation

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Click the Payrpl calculator tab at the bottom of the page. The sheet will open.

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Find staff. Identify the first employee for whom you entered information on the Employee Information page. Their names will be at the top of this page.

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Enter the number of working hours. In the “Regular Hours Worked” column, enter the number of hours this employee worked (such as 40 ) during the pay period.

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Add vacation or sick time as needed. If your employees have used vacation or sick time, note the corresponding hours they took off in the “Vacation Hours” or “Sick Hours” columns.

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Enter overtime and rate. If your employees have overtime (for example, over 40 hours per week), enter the number of overtime hours in the “Overtime Hours” column, then enter the overtime rate (in dollars) in the “Overtime” column Rate”.

Overtime pay rates are typically 150 percent higher than the employee’s normal rate (“one and a half times”).

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Add deductions (if any) at the end. In the “Other Deduction” column, enter the dollar amount of a deduction that is different from regular deductions.

For example, if the employee took a deduction to purchase equipment, you’ll need to enter the amount here for a one-time payment.

Advice

Once you’ve finished calculating a pay period, it’s a good idea to save the sheet before deleting and creating a new payroll.

Warning

Do not delete any preformatted cells (such as cells with pre-formulated formulas) as this will cause the payroll spreadsheet to fail.

Steps

Create payroll

Enter employee information

Payroll calculation

Advice

Warning

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