Paycheck Calculator Massachusetts - MA

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Massachusetts - MA Paycheck Calculator: Hourly and Salary

Massachusetts, located in the northeastern United States, is the most populous state in the New England region. This state lies between New Hampshire, Rhode Island, Vermont, Connecticut, and New York, with 80% (about 7 million in 2018) of its residents living within the Greater Boston Area, making it one of the most heavily populated areas in the United States.

The Commonwealth of Massachusetts has many pros and cons and welcomes new residents to enjoy all the state has to offer. So if you are offered a new job here, or planning to start a new life with a small business, then you need to know some of the important aspects, before relocating.

Moreover, before choosing a job or start a new business, you must know about your take-home income. For the job, it is the amount you receive in a paycheck, and for small businesses, it is your profit after deducting all costs, including employment cost. Therefore, this guide will also help you calculate the Massachusetts paycheck so that you can easily determine your take-home income.


The thing you must know before moving to Massachusetts:

Cost of Living and Housing:

According to reports, Massachusetts is the third most expensive place to live in America, with the cost of living index of 127.2, which is significantly higher than the national average of 100 points. Cities like Boston and Cambridge, are a way for expensive than the rest.

Besides other costs of livings, housing in this state is also relatively expensive with the median home value in Massachusetts is $391,700, which is fairly higher than the national average is $215,600. Moreover, the median rent price is $2,700. Therefore, you are suggested to go for the western part of the state with a comparatively lower cost of housing.

Education:

Massachusetts is ranked # 1 in K–12 education, with some of the prestigious schools, colleges, and universities in the world including Massachusetts Institute of Technology (MIT), Harvard University and Boston College.


Outdoor Activities:

In terms of outdoor activities and natural beauties, Massachusetts has numerous gems and beauties to explore including beaches, ocean views, Family Friendly Tours, Nature & Parks like Shining Sea Bikeway, Sights & Landmarks, Museums, Zoos & Aquariums, and memorable Nightlife opportunities.


Job and Business Opportunities:

As we are done with all the above-mentioned pros and cons, let's get to our main topic regarding job, business, and paychecks.

Massachusetts is one of the wealthiest states with the seventh-best economy in the United States and also ranked in the top 10 best states for business environment and employment. The median household income in this state is $41,821 with the unemployment rate of 3.5% that is fairly lower than the national rate of 4.2%.

Massachusetts has a great business and job opportunities in industries like Hospitals, nursing, and residential care, Finance, Technology R&D and Innovation, Tourism, Education, etc. However, due to flourishing income opportunities, the cost of living is getting expensive, so you have to ensure your solid income before venturing into this Red Sox territory.

To deduce a take-home income from a job or small business, paycheck plays an important role. And for Paycheck calculation, you have to go through several calculations, taxes, and laws, making the whole process confusing, hectic and time-consuming.

But don't worry! We have done all the hard work for you. Our state-of-the-art Paycheck Calculator along with the following comprehensive guide, you can calculate the Massachusetts take-home pay within minutes. But before jumping to the steps to calculate paycheck, you must be aware of the following Massachusetts Payroll Facts.


Massachusetts Payroll Facts:

  • Massachusetts employees are charged with Federal Income tax at the rates ranging from 10% to 37%, with seven tax brackets depending on filing status and income level.
  • The federal taxation department also requires the employers to withhold FICA taxes from employee's paycheck and employers must pay matching amounts themselves for each employee.
  • The State also charges a State Income tax of paycheck, at a flat rate of 5.05%. The tax is charged on both earned income (salary, wages or commissions) and unearned income (dividends and interests)
  • No city or county in Massachusetts charges any local income tax onto its residents.
  • The Federal minimum wage rate is $7.25. Whereas Massachusetts minimum wage rate is $12.75 per hour (1st January 2020 onwards) for non-exempted employees. Moreover, the minimum wage in Massachusetts is scheduled to go up in steps to reach $15 per hour in January 2023.
  • The Cash Minimum Wage rate for Tipped employees (earning $20 or more in tips per month) is $4.95 an hour, with a maximum tip credit of $7.80.
  • The median household income of Massachusetts residents is $33,385, according to United States Census Bureau.
  • The livable wage in Massachusetts for a single adult is $13.96, and for a couple (1 working) with 2 children is $27.61, according to Massachusetts Institute of Technology.
  • The average salary of employees in Massachusetts is $72,244, according to ziprecruiter.com.
  • Massachusetts doesn't have a reciprocal agreement with any other state. Therefore, non-resident workers have to pay taxes in the state.
  • The state doesn't charge any State Disability Insurance (SDI) tax on either employer or employee. However, the employers are required to pay State Unemployment Insurance Tax at the rates ranging from 0.83% to 12.65%, on the first $15000, earned by each employee in a year. However, new employers are given relief as they only have to pay a flat rate of 2.13% (There are some exemptions for a few employees, that are available on the Massachusetts official site.

How to calculate Take-Home Pay in Massachusetts?

To calculate Take Home Pay or Paycheck, you need to go through several steps that include calculation of Gross Pay, Pre-Tax Deductions, Federal Taxes, State Taxes, Post Tax Deductions, Local Tax, etc.

To make it easy for you, we have divided this guide into steps, which would give a general idea. However, there may be some differences or additional taxes that you may be subjected to, according to your situation. As it's a comprehensive guide, we can only discuss general aspects.


Step 1 - Calculating Gross Pay:

  1. To calculate Gross Pay, first, you need to determine the Pay Type of an employee. It is whether an employee is paid on an hourly basis or salary basis.

Hourly Employees:

Hourly Base Employees are paid for each hour they work in a day or a week, at the mutually agreed hourly rate. However, the mutually agreed hourly rate must be as per the Federal and State Minimum Wage law.

Hourly Employees are also entitled to receive overtime, for each excess hours worked after Regular worked hours in a day or week. The overtime rate in most of the states is one and a half times the regular hourly rate.


Salaried Employees:

Salaried employees receive a fixed but mutually agreed on pay, for a decided pay frequency, usually semi-monthly or monthly. However, for gross payment determination for a pay period, the annual salary is divided by the pay frequency.

Most of the salaried employees are exempted from Overtime law. Therefore, they are not entitled to receive overtime, regardless of how many excess hours they work. However, some exceptional salaried employees may be eligible to receive overtime according to federal or state law.


  1. Remember, Supplementary Wages like bonuses, commissions, and paid leaves, as well as double time and fringe benefits, are also taxable wages. Therefore they must also be included in gross pay before federal and state tax calculation.


Step 2 – Subtracting Pre-Tax Deductions (If Any):

Pre-Tax Deduction is an amount deducted from employee's gross pay before any withholding tax is deducted. These deductions have several advantages, including the reduction of taxable wages. Hence, increasing the take-home pay of an employee. However, not all deductions can be considered as free from all taxes, which means some of the deductions may require certain taxes to be withheld.

Some of the standard Pre-tax deductions are:

  • Health Savings Accounts or FSA or HSA plans
  • Commuter Benefits
  • Healthcare Insurance
  • Short-Term Disability
  • Dental Insurance
  • Medical Expenses and Flexible Spending Accounts
  • Vision Benefits
  • Retirement funds like a traditional 401(k)

Note: Pre-Tax deduction rate changes from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before making any deductions.


Step 3 – Calculate and Subtract Federal Taxes:

Federal Taxes are taxes deducted from almost every employee, regardless of which state or county they work in.

Federal Taxes are calculated according to the details provided by the employee on Form W-4, which comprises of income, filing status, number of dependents, number of allowances, number of jobs, etc.

The details are form W-4, are assessed and used by the employer to deduce the federal tax bracket, in which the employee's taxable wage lay upon.

Federal Taxes ranges from 0% to 37% have seven tax brackets, depending on filing status, income, and the number of allowances claimed. Below is the income tax details for the year 2019:


Single Filers
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,400 10%
$19,400 - $78,950 12%
$78,950 - $168,400 22%
$168,400 - $321,450 24%
$321,450 - $408,200 32%
$408,200 - $612,350 35%
$612,350+ 37%

Married, Filing Separately
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $306,175 35%
$306,175+ 37%

Head of Household
Taxable Income Rate
$0 - $13,850 10%
$13,850 - $52,850 12%
$52,850 - $84,200 22%
$84,200 - $160,700 24%
$160,700 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Step 4 – Deduct FICA Taxes:

Along with Federal Withholding, employers are also required to withhold Federal Insurance Contributions Act (FICA) taxes from the employee's paycheck as well as pay a matching amount themselves to the IRS.

There are two types of FICA taxes:

  1. Social Security:

Employers are entitled to withhold 6.2% from the first $132,900 (wage base limit for 2019), taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.


  1. Medicare:

Medicare tax is another type of FICA Tax that an employer must withhold from the taxable gross wage of the employee, at the rate of 1.45%. Unlike social security, there is no wage base limit. However, if the employee earns more than the defined threshold than he/she is subjected to an additional 0.9% of the Additional Medicare Tax rate, for every dollar earned above the threshold amount.

Like Social Security, IRS also requires the employer to pay an equal amount of Medicare tax for each employee.


Step 5 – Payment of FUTA Taxes

The Federal Unemployment Tax Act (FUTA) is a tax that the IRS requires the employer to pay without deducting anything from the employee's paycheck.

The FUTA Tax rate for 2019 is 6.0% of the first taxable wage up to $7000 of an employee. However, once the taxable wage limit is crossed for a particular employee, then the employer no longer has to pay this tax.

What to reduce FUTA Tax?

Yes! Then you must pay State Unemployment Insurance (SUI) tax in full and on time and get a FUTA tax credit of up to 5.4%. Which means, you saved a whopping 90% from FUTA Tax.


Step 6 – Subtract Post-Tax Deductions (If any):

Although, employers are not required to withhold any amount as a post-tax deduction, unless if an employee voluntarily asks to do so. However, there are some deductions ordered by the court like child support or wage garnishment, which the employer is entitled to deduct.


Step 7 – Withhold Massachusetts State Payroll Taxes:

As were are done with federal taxes, let's talk about State Payroll Taxes. Massachusetts State requires the employers to withhold state withholding tax at a flat rate of 5.05% from the employee's paycheck, regardless of income level or filing status.

Employers are required to calculate the withholding amount according to the details provided by the employee in Form M-4. The employee fills this form at the time of enrollment, and it includes tax-related details such as filing status, income, number of allowances to be claimed, etc. Employees are suggested to update the details on Form K-4 regularly when any significant event occurs in their lives like marriage, child's birth, or divorce.


State Unemployment Insurance (SUI) Tax:

Like most of the states, Massachusetts also requires the employer to pay State Unemployment Insurance (SUI) Tax, range from 0.83% to 12.65%, on the first $15,000 in wages paid to each employee in a Year. However, if the employer is new, then he gets the relief to pay a flat rate of 2.13% of the wage paid to each employee. However, new construction employers have to pay 6.3%.

Moreover, Employers also required to pay a WorkForce Training Contribution of 0.056%, and a Health Insurance Contribution (also called Employer Medical Assistance contribution) of 5%.

Note: Employees are not required to pay this tax.


Step 8 – Withhold Local Tax:

No city or county in Massachusetts charges any local income tax onto its residents.


Step 9 – Calculate Pay Check:

Once you are done with all elements (steps) discussed earlier, you will have a net pay amount for each employee. Now all you have to do is pay employees on time. Also, to file all Federal Taxes, State Taxes, FICA, and FUTA taxes on time, to avoid any penalties.


Massachusetts Payroll Laws:

  • Massachusetts labor law requires the employer to pay hourly employees on a weekly or bi-weekly pay frequency. However, salaried employees can be paid weekly, biweekly, or semi-monthly basis. Moreover, salaried employees are also allowed to choose monthly pay frequency upon their will.
  • The state requires the employer to maintain regular paydays, that should be:
    • Not more than 6 days after the pay period ends for employees having a workweek of 5 to 6 days.
    • Not more than 7 days after a pay period ends for employees having a workweek of 1 to 4 days OR 7 days.
  • The Minimum Wage rate for non-exempted employees by federal is $7.25, and Massachusetts is $12.75. However, certain employees are exempted from the Minimum wage law; some of them are as follow:
    • Tipped Employees: Employees that earn more than $20 per month in tips are allowed to be paid a cash minimum wage rate of $4.95, with the maximum tip credit of $7.80.
    • Agricultural Workers: They are allowed to be paid at the minimum wage rate of $8 per hour.
  • The employers in Massachusetts do not have to pay extra for the weekend, holiday, or night work to their employees. Moreover, the state doesn't even require the employer to compensate for vacation when the employee didn't work or severance pay. However, employees are entitled to receive sick leave under certain conditions.
  • The state requires the employers to pay overtime to non-exempted employees for each extra hour worked after 40 hours in a workweek. However, State law does not require overtime pay for excess hours after 8 hours in a day. However, executives, professionals, administrative employees, and some seasonal workers along with some other employees are exempted from this law.
  • There are some terms and conditions stated by the State for Minimum wage and Overtime, which you can find here.
  • The state also has a "The Massachusetts Blue Laws" that regulated work hours for businesses, and also requires the employers to pay a Premium pay to their employees for working on Sundays and some legal holidays.
  • Massachusetts requires the employer to provide UNPAID lunch breaks to the employees after every 6 hours of work a workday. Moreover, if an employee agrees to work during a break than the employee must be paid for the time.

How to affect your Paycheck Amount in Massachusetts?

There are several instances when we are looking for ways to decrease payroll taxes on a paycheck or increase your paycheck amount, for which you can follow the points below:

  • If you were charged with a huge tax bill by Federal or State last year, then you must revise your number of Allowances on form W-4 and form M-4, as claiming more than required allowances can cause underpayment of taxes, resulting in penalty along with a huge tax bill at the end of the year. Moreover, you can also specify the number of additional dollars on Form W-4, and Form M-4, you want to withhold as "additional withholding" from the paycheck.
  • If you are earning more than required, then you can increase your pre-tax contribution in tax-advantaged accounts like a 401(k), HSA, or FSA. These contributions are not taxable and can be used after retirement or for medical expenses, etc.
  • Contributions in 590 College saving plans and enrolling in a commuter benefits program provided by the employer can also save taxes on your paycheck.
  • Try working extra to earn commissions, tips, bonuses, and overtime to increase your paycheck amount.
  • You can schedule a meeting to discuss your options with your company's HR department or your employer for pay appraisal. And if it isn't possible, then try looking for a job with a higher paycheck amount.

FAQs

Answer: Following are the types of taxes and their percentages taken out of the paycheck in Massachusetts:

  • Federal Income Tax: This tax is charged at the rate ranging from 10% to 37%, having seven tax brackets depending on filing status and income level.
  • State Income Tax: This tax is charged by the state, at a flat rate of 5.05%, regardless of filing status and income level.
  • FICA Tax: This tax comprises of Social Security Tax of 6.2% and Medicare tax of 1.45%, charged on a paycheck. If the annual income of the taxpayer increases a certain threshold, then the taxpayer is charged with additional Medicare surtax of 0.9%.

Answer: You have to pay Massachusetts state income tax, if:

  • You are a full-year resident, with a gross annual income of $8000 or more.
  • You are a part-year resident, with a gross annual income of $8000 or more.
  • You are a non-resident employee in Massachusetts with a gross annual income of $8000 or more.

Answer: You have to make a gross amount of $8000 or more to file taxes in Massachusetts.

Answer: The average hourly wage in Massachusetts is $35.

Answer: The Massachusetts minimum wage rate is $12.75 per hour (1st January 2020 onwards) for non-exempted employees. Moreover, The Cash Minimum Wage rate for Tipped employees (earning $20 or more in tips per month) is $4.95 an hour, with a maximum tip credit of $7.80.

Answer: The livable wage in Massachusetts for a single adult is $13.96, for a couple (1 working) with 2 children is $27.61 and for a couple (both working) with 2 children is $18.13.

Answer: The Minimum wage is Boston, Massachusetts is the same as the state minimum wage of $12.75 per hour (1st January 2020 onwards) for non-exempted employees.

Answer: Following Payroll taxes are charged on employers and employees in Massachusetts:

  1. Federal Income Tax: This tax is charged on employees, at the rates ranging from 10% to 37%, having seven tax brackets depending on the filing status and income level.
  2. FICA Tax: This is another tax charged by the federal on both employers and employees. This tax comprises of two taxes, charged on the employees, and the matching amount is paid by the employer for each employee. The employee's portion comprises of 6.2% of Social Security Tax and 1.45% of Medicare Tax. Moreover, if the employee's income exceeds the defined threshold, they are also charged with the additional Medicare tax of 0.9%.
  3. State Income Tax: This tax is charged on employees, at a flat rate of 5.05%, regardless of filing status and income level.
  4. State Unemployment Insurance (SUI) Tax: Only employers in Massachusetts are required to pay State Unemployment Insurance (SUI) Tax at the rates ranging from rates range from 0.83% to 12.65% on the first $15,000 earned by each employee. However, new employers are only required to pay at a flat rate of 2.13%.
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