Paycheck Calculator Colorado - CO

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Additional Information


Colorado - CO Paycheck Calculator: Hourly and Salary

Colorado, A heaven for nature lovers. This place has an abundance of desert lands, rivers, forests, canyons, and high plains. This state is also famous for its southwest corner borders, which act as a point where four states, Arizona, New Mexico, and Utah, meets.

Moreover, the cities like Colorado Springs, Boulder, Castle Rock, Lakewood and Fort Collins are bathed in scenic beauties, making them the most live-able and desired placed to live in Colorado.

Colorado has the third fastest growing economy in the United States and is the house some of the most growing industries like construction, leisure, mining, and hospitality. This state is also known for providing a much-relaxed work environment to its workers, especially insisting on outdoor activities, as compared to the rest across the country.

Apart from all these perks, this State is slightly more expensive, having a 12% higher cost of living than the other states in the United States.

So if you are about to settle and start as Small business owners or an employee in the Centennial State, you must know how must you will pay to your employees or earn as an employee. Wherefore, we have created a fantastic Paycheck calculator that would help you minimize the load of paycheck calculations and give you your desired results in no time with accuracy.

For calculating the Paycheck efficiently and accurate, you must know about the components and steps that are required. Therefore, we have written down an amazing step-by-step guide to calculating Take-Home of an Employee working in Colorado, for which you must continue reading.


Colorado Tax Facts:

  • The Minimum wage for hourly employees in Colorado State is $11.10, which is $3.85 higher than the Federal Minimum Wage.
  • The minimum cash wage for tipped employees is $7.18, with having the maximum tip credit limit of $3.02.
  • Colorado's state charges a flat rate of 4.63% of your federal taxable income as State Income tax, regardless of how much you earn.
  • Apart from Federal and State Income Taxes, employers may also withhold the amount as local Withholding from the employees working in specific cities like Aurora, Denver, and Greenwood Village.
  • Unlike many states in the United States, Colorado State charges the same income tax rate for income and Supplemental Wage/Bonus Rate of 4.63%.
  • The Colorado State requires to pay up to 15% less of the minimum wage, to the minors under the age of 18.
  • Colorado State requires the employer to pay their hourly employees, the overtime at a rate of one and half of the regular hourly rate for every access hour worked after 40 hours regular in a workweek. Moreover, it also required to pay ANY employee, who works for more than 12 hours in a single day, at least one and a half time more than the regular hourly rate, for every extra hour worked after overtime limit. However, certain employees are exempted from overtime law that you will know ahead in this guide.
  • The average household income of the Colorado Residents is $65,458, as reported by the United States Census Bureau.

How to calculate Paycheck in Colorado

To figure Paycheck (Take-home Pay) of an hourly or Salary based employee, working in Colorado, you must go through several steps. Remember to read the relevant Federal Laws and State Laws provided with most of the steps that would help you to determine the near to actual Paycheck amount.

Step 1: Determine the Pay Type

The first and the foremost step in paycheck calculation is Pay Type, as it plays a vital role in the whole. Usually, employees are paid in two pay types, which are as follow:

  • Hourly Pay Type: Employees on Hourly Pay are paid an hourly rate for each hour they work in a day. They are also entitled to receive overtime and maybe double-time (depending on the State Laws) for each excess hour they work after regular hours. The employer decides the Hourly Rates. However, the minimum wage rate along with Regular Hours, Overtime, and double-time rates & hours are to be determined according to federal and State Laws (which are discussed in detail ahead).
  • Salary Pay Type: Employees on Salary, are paid a fixed amount, for a decided pay frequency (usually semi-monthly or monthly). However, they are not entitled to receive overtime or double time pay by the federal or state law, regardless of how many hours they worked. But the incentives they receive are often more significant versus hourly employees.

Colorado State and Federal Laws on Pay Type:

  • Colorado State allows several pay types including, salary, hourly, commission, time, task, etc. and requires the employer to pay not less than the Minimum wage of $11.10 (effective January 1, 2019). However, they can less any applicable lawful credits for all hours worked from the pay.
  • There are no such state laws by Colorado that regulates the Hour Worked, Regular Hours for adults. Therefore, the adult employers and employees must follow the guideline provided by U.S Wage and Hours Division and FLSA (Fair Labor Standard Act). However, Colorado State Law does have laws to regulate overtime, which you will read in Step 3 ahead.

Step 2: Determine the Pay Frequency

The second step is to determine the Pay Frequency of your Paycheck; it is how often the employees are paid. All States have their law for pay frequencies. Therefore, you must study the State Payroll law (discussed below in this step) before calculating the paycheck.

Some of the standard Pay Frequencies are:

Pay Frequency Details
Weekly The employees are paid once a week.
Bi-Weekly The employees are paid once every two weeks.
Semi-Monthly The employees are paid twice a month. Usually on the 15th and 30th day of the month.
Monthly The employees are paid once every month. Mostly at the start or end of the month.
Quarterly (Discouraged by Colorado State) The employees are paid after every three months.
Annually (Discouraged by Colorado State) The employees are paid once a year.

Colorado State Laws for Pay Frequencies:

  • Colorado State requires the employer to schedule the regular payday along with the time and place of payment.
  • Colorado State, allows the employer and employees to work out mutually on the pay frequencies. However, in the absence of such mutual agreement, the employers require to pay all the wages or compensations payable or due for regular pay periods. Moreover, the regular Pay period shouldn’t be of a higher duration than thirty days or one calendar month, whichever is longer.
  • Regular paydays of each Pay Period shouldn't be longer than ten days after the closing of the pay period.

Step 3: Determine the Gross Pay

The third step is to determine the Gross Pay of the employee. Gross Pay is the amount of money an employee has earned in the last pay period. It consists of several components that are essential to consider to calculate Income Taxes, Deductions, and contributions. Below are the vital elements to deduce gross pay:

Hourly Employee:

  1. Basic Salary is calculated by multiplying Number of Hours worked in a pay frequency by Regular Hourly Rate.
  2. Overtime pay is calculated according to FLSA law, where every extra hour worked after 8 hours workday or 40-hours in a week, would be counted as Overtime hour that must be paid in time and half of regular hourly rate.
  3. Double Time Pay is a time that an employee is paid in double the regular hourly rate by the employee. It is paid if the employee works on federal holidays. However, their employers are not bound to pay it according to FLSA or Colorado State law.
  4. Now, to deduce the Gross Pay, we need to add Overtime Pay, Double Time Pay, Bonuses, Commissions, fringe benefits, Vacations Pay, Sick Pay, and Holiday Pay (If Any) into Basic Salary.

Note: We provide multiple calculators to calculate Total Hours Worked and Overtime that you can use to calculate your Paycheck. They are as follow:

Salaried Employee:

  1. To determine the gross salary for the employee, start with the annual salary and divide it by the number of pay periods to get a basic salary. For example, if the employee’s annual salary is $27400, and is paid once a semi-month, then you must divide 27400/24. Therefore, the employee's basic salary is $1142.
  2. Now, add (if any) reimbursements, commissions, bonuses, *fringe benefits, or tips to the basic salary of the employee.
  3. Next, you need to add overtime pay into basic salary, only if the salaried employee has a salary equal to or below $455 a week or $23,660 annually. The FLSA regulates this, and the employee must be paid overtime at the rate of time and half of the hourly rate.
  4. Last, subtract any unpaid time off(s) from the basic salary to get Gross Pay.

*Fringe Benefits:

Fringe benefits are the benefits offered by employers to employees who meet specific criteria set by the company. These benefits are often taxable and can affect the employee's paycheck.

The Fringe benefits are often deducted from employee’s Paycheck by Specific Dollar Amount or Percentage of the Gross Pay.

Some of the common Fringe Benefits are:

  • Health Insurances, including Medical, Dental, and Vision.
  • Individual HSA or Family HSA.
  • Housing, Company Car, and Cell Phone.
  • Gym and Fitness.
  • Student Loan Repayment.

Colorado State and Federal Laws on Gross Pay:

  • Colorado State Law requires the Employers to pay their non-exempted Employees the overtime at the rate of time and one-half of the regular rate, for any work hours in excess of: 
    • 12 hours of the workday, or
    • 12 consecutive hours. Regardless of the starting and ending time of the workday (excluding duty-free meal periods), or
    • Forty hours of the workweek.

Note: For further details on Overtime, Wage order, and overtime exemptions details, you can read the Colorado State – Overtime Laws.

  • According to Colorado State Law, the Employers must pay a minimum wage of $11.10 (Effective January 1, 2019) to their employees. The minimum wage is proposed to increase to Minimum Wage $12.00 from January 1, 2020.
  • Colorado State requires the employers to pay Minimum cash wage to tipped employees at the rate of $8.08 (Effective January 1, 2019), with having the maximum tip credit limit of $3.02. The minimum wage for Tipped Employees is proposed to increase to Minimum Wage $8.98 from January 1, 2020.
  • IF both Hourly and Tipped Employees are covered by federal and Colorado state minimum wage laws, then the employer must pay the higher minimum wage to both types of employees.
  • Minimum Wage for youth (any person under the age of eighteen) by the state is $9.44, whereas it is $4.25 by federal law.
  • For meals and lunch breaks, Colorado State Law entitles the employer to provide 30 minutes of unpaid lunch breaks to their employees, if they work for consecutive five hours.
  • Colorado wage law doesn't abide by the employer to provide paid vacations. Therefore, it is totally up to the employer to volunteer for this benefit.
  • Employers are entitled to provide 10 minutes of rest break to their employees after every four hours or major period of work.
  • Colorado State wage law does not prohibit nor require any paid holidays, severance pay, bereavement pay or bereavement leave or sick pay or sick leave.

Step 4: Determine the Filing Status:

Here starts the complicated part. After the Gross Pay for the employee is deduced, the next thing an employer should do is refer to the W-4 tax form of an employee. This form is filled by the employee while joining the job.

Note:

  • The employee has to update his Form W4 if any significant changes come to his/her life. Such considerable changes include marriage, divorce, or child-baby.
  • The employee also has the authority to make a change in his/her form W4, an unlimited number of times, but only once per paycheck.

The form W4 contains all the essential details, including income tax details, marital status, and the number of allowances to be claimed. These details are required to calculate the Taxable Income, Federal Taxes, Allowances, State Taxes, and Local Taxes, that the employer has to withhold from the employee's salary.

Note: As IRS has made changes in the Tax Form W4, which would be effective from January 2020. Therefore, all the following steps are according to the new form.

There is a total of four filing statuses, from which the employee has to choose one. These are the following:

  • Single
  • Married filing separately
  • Married filing jointly
  • Head of Household

Note: You can select "Single" as Marital Status on the Colorado Paycheck Calculator if the employee is "Single" or "Married filing separately." Else Choose "Married" if the employee is "Married Filing Jointly" or "Head of Household."


Step 5: Calculating the Taxable Income:

Taxable income is the income, which is used to determine the amount of taxes that should be withheld from the employee’s paycheck by the employer. It is different from Gross Pay.

There is the portion of income that is exempted from the taxes, such as cash gifts, inheritances, rebates, Welfare income, child support, State and local tax refunds, Life insurance, etc. This portion can be determined and claimed by the taxpayer (employee) by using "itemized deductions."

As the "itemized deductions" process is too long, the Taxpayer can also go for “standard deductions (a specific amount defined by the government to be deducted from Gross Pay according to taxpayer’s filing status” instead, for calculating the Taxable Income.

Standard Deduction amount for 2018 to 2025 is as follow: 


To determine the Taxable income, the taxpayer (employee) has to:

Filing Status Standard Deduction Amount
Single $12,000
Married Filing Separately $12,000
Married Filing Jointly $18,000
Head of Household $24,000
Qualifying Widow(er)s $24,000

  • Subtract any “Standard deductions” or “Itemized deductions” deductions from the Gross Pay.
  • Subtract any “tax exemptions” such as “dependent exemption”

Note: This is just a general overview of Taxable Income. Many other factors need to be considered for Taxable income determination. Moreover, the criteria can be different from person to person. You must refer to your Lawyer, or study Taxable income in detail for calculating the accurate Taxable Income.


Step 6: Subtracting the Pre-Tax Contributions from Taxable Income:

As of now, the taxable income of an employee is deduced. The next step is to subtract any pre-tax contributions that were chosen by the employee. These contributions are designed to encourage employees to save for their retirement. Additionally, it further reduces the amount of taxable income, hence, increasing the take-home amount of an employee.

However, not all contributions are exempted from all taxes, but only from federal income tax. Therefore, some employees may have to pay FICA, state, or other taxes on such contributions.

Following are some of the common contributions that an employee can choose:


  1. Traditional 401(k) or 403(b) or other qualified retirement plans
  2. traditional IRA - Individual Retirement Accounts
  3. Solo 401(k), SEP-IRA or SIMPLE IRA
  4. healthcare savings account (HSA)
  5. Dental Insurance
  6. Vision Insurance
  7. Commuter Benefits including commuter parking, commuter transit, and commuter benefits
  8. Health Insurance
  9. Dependent care FSA contributions 

Step 7: Deducing the Number of Federal Allowances:

Before jumping on to Federal Taxes, it is essential to conclude the number of Allowances that an employee needs to claim.

Allowances are exemptions from paying a certain amount of income tax. Therefore, the amount of withholding tax that an employer withholds from the employee’s paycheck is inversely proportional to the number of allowances claimed.

General Number of Allowances a Taxpayer (Employee) must Claim
Situation Number of Allowances to claim
The taxpayer depends on someone 0 to 1 Allowance
Single – One Job – Taxpayer doesn't depend on anyone 1 to 2 Allowances
Married Couple with no dependents 2
Head of Household with one dependent 3
A married couple with one dependent 3
A married couple with two dependent 4

Effects of Allowances on Federal Taxes

The employee in form W4 already fills details of claimed allowances. The employee must do a complete working before filling out the details for the number of allowances he/she needs to claim as claiming extra Allowances may cause underpayment of taxes that results in a penalty by the IRS. On the other hand, claiming fewer Allowances is like lending money to IRS without any benefit.


Details on how many allowances an employee must claim are provided here.


Step 8:  Subtracting the Federal Taxes

Once the final taxable income is calculated after subtracting all deductions (standard or itemized) and contributions, a certain amount is withheld by the employer from an employee's paycheck as federal income tax along with the two federal (FICA) programs: Social Security and Medicare.


Federal Income Taxes

This Federal Income Tax rate is applied at a gradual level, ranging from 0% to 37% of taxable earnings. The Tax rate depends on the filing status, number of Allowances claimed, and taxable income.

Therefore higher the income, the higher the federal tax rate, and the higher the number of Allowances claimed, the higher the Net Pay (Take-home Pay).

These rates are as follow:

Single Filers
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,050 10.0%
$19,050 - $77,400 12.0%
$77,400 - $165,000 22.0%
$165,000 - $315,000 24.0%
$315,000 - $400,000 32.0%
$400,000 - $600,000 35.0%
$600,000+ 37.0%

Married, Filing Separately
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Head of Household
Taxable Income Rate
$0 - $13,600 10.0%
$13,600 - $51,800 12.0%
$51,800 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

FICA Taxes (Social Security and Medicare):

In addition to the Federal Income Tax, Employers are also abided to withhold an amount from the employee’s paycheck for FICA Tax (Federal Insurance Contributions Act). These taxes are used to help American citizens with retirement, disability, survivorship, and medical treatment.

FICA Tax comprises of:

  1. Social Security Tax

A total of 12.4% of FICA tax is paid for Social Security, by both employee and employer. Here 6.2% is paid by the employee and remain 6.2% is funded by the employer. However, the Social Security tax is only applicable to the first $132,900 (in 2019) earned. No amount is charged above this earning,

  1. Medicare Tax

1.45 percent each is paid to Medicare by both employee and employer. Moreover, if the taxpayer (employee or employer) earns more than $200,000 as a single filer or $250,000 as a married couple than additional Medicare taxes of 0.9% are to be paid.


Note: If you are calculating your federal taxes as an employer, you have to add FUTA unemployment taxes in addition to FICA taxes, which is 6% of the first $7,000 of each employee’s taxable income. Moreover, you can also claim a tax credit of up to 5.4% for state unemployment tax you pay, only if you pay on time and in full.


Step 9: Subtracting State Taxes:

As you are done with Federal Taxes, now it's time for Colorado State Payroll Taxes. Both Employer and Employee must pay these taxes. However, it's the employer's responsibility to withhold it from the employee for the State. Below are the Payroll Taxes:

Colorado State Withholding Tax:

Colorado State charges a flat income tax rate of 4.63%, regardless of income or filing status. The State requires the employer to withhold it from the employee's gross pay.

Colorado State UI or SUTA/SUI:

Colorado State requires the employee to pay an Unemployment (UI) Tax Annually, on a percentage of all wages paid to employees in a year (having an annual wage limit of $12,600.00 per employee). This tax has a wage base of $13,100 (in 2019) with a rate range from 0.62% to 8.15%, having a rate of 1.70% for non-construction trades. However, this percentage changes each year.


Quick Tip

Taxpayers can increase the take-home pay by claiming the accurate number of allowances on Colorado State Tax. Moreover, they can further reduce the tax bill by subtracting Standard or Itemized deductions from the taxable income.


Colorado State Laws on State Income Tax:

  • Colorado Residents, working in other states, and have paid the taxes there, then you might be eligible for a tax credit for a tax paid to the other state.
  • On-duty military Personals are exempted from paying Colorado State Taxes.
  • Full-Time Residents, Part-Time residents with taxable income, or non-residents of Colorado but having earning source from this state are eligible to pay Colorado State Income Tax
  • Colorado State income tax rates for income and Supplemental Wage/Bonus are the same 4.63%.

Step 10: Subtracting the Local Taxes

Apart from Federal Payroll Taxes and State Payroll Taxes, employees and employers are also subjected to Local Taxes as Occupational Privilege Tax (OPT), but only in certain counties. Below is the Colorado local county tax and withholding information: 

County

Paid by Employee

Paid by Employer

Aurora

$2 per month for monthly earning > $250

$2 per month per employee

Denver

$5.75 per month for an employee earning > $500 per month

$4 per month per employee

Glendale

$5 per month for an employee earning > $750 per month

$5 per month per employee

Greenwood Village

$2 per month for an employee earning > $250 per month

$2 per month per employee

Sheridan

$3 per month for an employee earning > $500 per month

$3 per month per employee

Step 11: Subtracting the Post-Tax Deductions and Contributions

Although employees are not charged any post-tax deductions. However, they can choose some post-tax contributions and benefits. If an employee has opted some, then its employer's duty to account them into the employee's paycheck.

Some of the common Post-Tax Contributions are:

  • Retirement funds like Roth 401(k).
  • A certain amount may also be withheld by the employer from the employee's paycheck as Wage Garnishments if the employee is subjected to any court-ordered garnishments.
  • Contributions to 529 college savings plans, Union dues or charitable donations.

Step 11: Calculating Paycheck

Once you have calculated all the details, as discussed above, then it's time to enter all your details into our Colorado Paycheck Calculator and deduce the paycheck “Net Pay” amount instantly.

FAQs


Answer: Colorado State charges a flat rate of 4.63% as State Income Tax, regardless of income and filing status.

Answer: Tax deduction from the paycheck depends on several factors, including filing status, income, allowances, and what state and county you are working in. Therefore, tax rates vary from employee to employee. Here are some taxes along with their rates may be deducted from a paycheck while working in Colorado:

  1. Federal Income Tax range from 0% to a top marginal rate of 37%
  2. FICA Tax (Social Security – 12.4% + Medicare – 2.90%. These taxes are shared equally between employer and employee)
  3. Colorado State Tax with a flat income tax rate of 4.63%
  4. Occupational Privilege Tax (OPT); only in some counties, including Aurora, Denver, and Greenwood Village.

Answer: As for payroll taxes, Colorado State should be considered as a high tax state, as it charges a flat rate of 4.63%. Meanwhile, the highest top marginal income tax rate is charged by California.

Answer: No, an employer is not required to offer PTO, according to Colorado State labor and employment law.

Answer: Yes, Colorado State has a state withholding tax of flat 4.63%.

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