Paycheck Calculator Montana - MT

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Montana - MT Paycheck Calculator: Hourly and Salary

Montana, a United States' western state full of treasures that attract millions of tourists each year. From the Great Plains to the Rocky Mountains and the home to hiker's paradise "Glacier National Park" featuring alpine meadows, pristine forests, rugged mountains, and remarkable lakes, this Big Sky Country has amazing places to explore.

Besides the tourist attractions and natural beauties to adventure, Montana also offers no sales tax, affordable housing, solid education, appealing income opportunities, and numerous other reasons to start your new life here.

So if you are planning to start your exciting life with a new career? Or got several job offers here in Montana? But having a hard time making your final decision, then DrEmployee has come up with a fantastic tool along with a comprehensive guide that would help you the following sections to make your decision easier:

  1. Things you must know before moving to Montana
  2. A detailed step by step Paycheck Calculation Guide to help you compare several job offers, or deduce the employment cost to choose which small business would be economical to start. Moreover, you can also calculate your Take-Home Pay from your recently joined job OR your employee's Paycheck for your recently started business in Montana. All of this would be done by using our Ultimate Montana Paycheck calculator.
  3. A quick overview of Payroll Facts, along with Federal & State Payroll Laws, are also included to make your payroll calculation accurate and more manageable.
  4. Frequently Asked Questions related to payroll.

Isn't that great? Yeah! So let's get started!


Things You Must Know Before Moving to Montana

Relocating from one country to another or one state to another is not an easy job. You require a lot of resources, planning, and prior knowledge to make your decision and migration easier and worth it. Here are some of the factors regarding Montana that you must know:


Cost of Living:

According to bestplaces.net, the cost of living index in Montana is 94, which is 6 points lower than the national index of 100 points. Transportation and utilities expenses are reasonably lower, whereas other factors like housing, grocery, and health cost are almost near to the national average.


Cost of Housing:

It is cheaper to rent a house in Montana, than buying one, as the Median rent cost of a single bedroom is $641 in Montana, which is relatively lower than the national median rent cost of $930. Moreover, the median house cost in Montana is $279,288, which is significantly higher than the national median house cost of $226,800.


Education:

Montana State has the 15th highest public-school spending in the nation and is ranked on number 24 in the US for States with the Best (and Worst) Schools by USA Today. There are more than 800 schools, colleges, and universities in Montana that boasts an 86 percent graduation rate. Some of the highly acclaimed colleges and universities are Montana State University, Carroll College (Helena), and the University of Montana.


Outdoor Activities:

Having a better education, a good job, and a beautiful house isn't enough for living a happy life. Traveling, exploring, and spending quality time with your friends and family while surrounded by a mesmerizing landscape is also essential. Wherefore, Montana is full of such mesmerizing views along with several other recreational activities, including Glacier National Park, Flathead Lake, the Museum of the Rockies, Big Sky Resort, Sweet Pea Festival, and lot more.


Weather:

Montana experiences all four seasons throughout the year, depending on which area within the state you live in. It snows throughout the year on high altitudes of 13,000 feet. In winter, the average temperature is -2°C, and in summer – 29°C.


Business and Job Opportunities:

Industries like oil, gas, lumber, and rock and coal mining as well as Agriculture, healthcare, and government are the one that contributes the most in State's Economy. Moreover, due to Glacier National Park, Yellowstone National Park, and many other tourist destinations, the tourist industry is also booming, thus giving an ample amount of business opportunities.

With Montana's unemployment rate of 4.1%, which is almost near to the National Unemployment rate, employees have a fair amount of chances to get a good job. The current fastest-growing careers in the state include construction workers, personal care assistants, physical therapists, plumber, and mechanic. Moreover, some of the highest paying jobs include OB/GYN, nurse anesthetists, and surgeons.


After exploring so many goodies about the state, you must have made up your mind to relocate here. So let's jump to our main topic of Paycheck calculation, which would help you with your job or business-related decisions (as discussed earlier). But before jumping to steps to calculate Paycheck in Montana, you must be aware of the following Payroll Facts:


Montana Payroll Facts:

  • Between 0% to 37% of federal income tax, which is distributed into seven tax brackets, depending on income level and filing status, are charged on the employee's paycheck.
  • IRS also charges FICA Taxes on both employers and employees at the rate of 15.3%, where 12.4% is for Social Security, and 2.9% is for Medicare Tax. Half of these taxes are levied on Employee, and the employer pays the other half.
  • Along with Federal taxes, Montana residents are also required to pay State Income Tax, which is charged at a progressive rate ranging from 1% to 6.9%, having seven tax brackets depending on income level, regardless of filing status. However, the Supplemental Wages and bonuses can be charged at a flat rate of 6%.
  • No city or county In Montana charges any Local Income Tax.
  • Employers are required to pay FUTA unemployment taxes charged by the federal at the rate of 6% of the first $7,000 of each employee's taxable income. Moreover, Employers are also required to pay State Unemployment Insurance (SUI) Tax at the rate ranging between 0% and 6.12% on the first $34,100 earned in wages by each employee in a year. However, for new employers, the SUI tax rate is lower and range from 1% to 2.4%, depending on the employer's industry.
  • The Federal Minimum wage rate for non-exempted employees is $7.25, whereas the Montana Minimum wage rate is $8.65. The exemptions are discussed in detail ahead.
  • The Federal Cash Minimum wage rate for Tipped Employees (earning more than $30 per month in the tip) is $2.13, with the maximum tip credit of $5.12. However, the cash minimum wage rate for Tipped Employees in Montana is the same as the regular minimum wage rate of $8.65.
  • Both Federal and Montana State requires the employers to pay overtime to their non-exempted employees at the rate of one and half regular hourly rate for each excess hour worked after 40 hours in a workweek. Some employees are exempted from this law, which we will discuss ahead.
  • Montana has a reciprocal agreement with North Dakota, which means any resident of reciprocal state working in another reciprocal state only requires to pay taxes to its home state. For example, Montana residents earning income in North Dakota pay taxes in the home state "Montana" instead of North Dakota.
  • The Median Household income in Montana is $52,559, according to United States Census Bureau.
  • The average livable wage for a single adult living in Montana is $11.38, and for a couple (one working) with three children is $29.02. According to stats provided by the Massachusetts Institute of Technology.
  • The average entry-level salary in Montana is $32,685 / Year, which is equal to the average hourly rate of $16.


As we are done with relocation to Montana and its payroll facts, now it's time to calculate paycheck. This paycheck calculation can help you compare different job offers, your take-home pay from your job in Montana, or your employment cost as an employer.


Step 1 - Calculating Gross Pay:

The very first step to calculating the paycheck amount is to determine Gross Pay. It is a wage that an employee earned in the last pay period.

Gross Pay is calculated differently for both hourly and salary-based employees, which is discussed in detail as follow:

Gross Pay for Hourly Employee

Hourly Employees are paid at a mutually agreed pay rate for each hour they work in a pay period. Usually Pay periods for Hourly employees are Hourly, Daily, Weekly, and Bi-Weekly. However, the Federal, State, and Local Wage law requires the employers to set the pay rate equals to or more than the defined Minimum Wage Law for the non-exempted employees.

Hourly employees are also entitled to receive overtime, for each excess hour worked after regular hours in a workday or a workweek. Remember, like Minimum wage; the employers are also required to follow Overtime wage law provided by the federal, state, and local authorities.


Note: All the relevant laws are discussed in detail ahead.


To calculate gross wage for an hourly employee:

  1. Calculate total hours worked in a Pay Period using the data from Timesheet or Timecard.
  2. Multiply Total Hours worked with the Hourly Rate (Pay Rate).
  3. Add overtime hours (if any) worked by the employee.

Quick Tip: You can also use our Timecard with overtime Calculator to calculate Gross Wage for Hourly Employee instantly.


Gross Pay for Salaried Employee

Salaried Employees are paid at the flat amount rather than on an hourly basis. The amount is usually mutually agreed as an Annual Salary, which is then paid in Semi-monthly or Monthly Pay periods.

Salaried employees are mostly exempted from overtime law. However, their salaries must be according to Federal and State Minimum Wage law.

To calculate Gross Pay for Salaried Employees:

  • Divide the "employee's salary" by "number of pay periods." For example: If the employee's annual salary is $25000 and is paid on a semi-monthly pay period, then the employee's Gross Pay would be: $25000 / 24 = $1042.

Don't forget that Supplemental Wages like Bonuses, commissions, tips, paid leaves, fringe benefits, or other taxable wages earned by the employee must be added into the Gross wages.


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

Once you are done with Gross Wages, it's time to subtract any Pre-Tax deductions from the gross wage to get taxable wages as Pre-tax deductions are not taxable for federal payroll taxes.

Pre-tax deductions are offered to the employees as benefits like fringe benefits, HSA plans, etc., to reduce their taxable income, hence, increasing their take-home pay amount. Remember, not all benefits are exempted from taxes, so choose the pre-tax deductions wisely.

Some of the common pre-tax deductible benefits are:

  • FSA - Flexible Spending Accounts
  • HSA - Health Savings Accounts
  • Retirement savings accounts like a traditional 401(k)
  • Some of the Fringe Benefits
  • health insurance
  • accident insurance
  • dental and vision insurance
  • Commuter Benefits
  • Short-Term Disability

Note: Pre-Tax deduction rate, contribution limits, special tax withholding rules change 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.

Many Taxpayers find it hard to itemize their deductions to calculate taxable wages, for which they go for standard deductions, that varies according to the filing status, as shown in the table below:

All Filers(Updated Dec 2019)
Filing Status Standard Deduction Amount
Single Filers $12,200
Married, Filing Jointly $24,400
Married, Filing Separately $12,200
Head of Household $18,350

Step 3 – Calculate and Subtract Federal Taxes:

Once you have determined the taxable wages, it's time to deduct Federal Income taxes for the Taxable wages.

IRS requires the employers to withhold federal income tax from the employee's paycheck, according to the details provided by the employee on Form W-4. The employee fills this form at the start of the job. The form includes all the necessary information, including income, number of allowances to claim, number of dependents, amount of additional taxes to deduct, and much more.

The employees are required to keep their Form W-4 up to date with all their current information, especially marriage, divorce, or child's birth.

The federal income tax is charged according to the tax brackets in which the taxpayer's income falls. The latest income tax brackets and rates are as follow:

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:

Besides, Federal Income Tax, the IRS also requires the employer to withhold FICA tax (15.3%) for the employee's paycheck and also requires the employer to pay an equal amount for each employee.

Federal Insurance Contributions Act (FICA) Taxes comprises of two types of taxes which are as follow:

  1. Social Security:

A total of 12.4% of social security tax is charged from which 6.2% is withheld from the employee's gross, and the employer pays the matching 6.2%. However, Social Security is only charged on the maximum taxable earnings of $137,700 for 2020.

  1. Medicare:

A total of 2.9% of Medicare is charged, from which 1.45% is withheld from the employee's gross, and the employer pays the matching 1.45%. Unlike Social Security, there is no maximum table earning limit for this tax. However, an additional surtax of 0.9% is charged as Additional Medicare Surtax on the employees having income over the specified level along with filing status, which is as follow:

Income Over Filing Status
$250,000 Married Filing Jointly
$125,000 Married Filing Separately
$200,000 Single

Note: Employers are not required to pay an equal amount for Additional Medicare Surtax.


Step 5 – Payment of FUTA Taxes

IRS requires the employer to pay another tax, known as The Federal Unemployment Tax Act (FUTA) Tax. This tax is paid at the rate of 6% on the first $7000 earned by each employee in a year. However, the IRS doesn't require the employees to contribute to it.

The employers who pay State Unemployment Insurance (SUI) tax in full and on time are given relieving FUTA tax credit of up to 5.4%, which saves a whopping 90% from FUTA Tax.


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

Post-tax deductions (after-tax deductions) is an amount the employer takes out from the employee's paycheck after taxes. Therefore, it does not affect taxable wages and the amount of tax payable.

Here are some of the types of post-tax deductions that employee may voluntarily choose:

  • Charitable contributions
  • Disability insurance
  • Garnishments
  • Specific Retirement Plans like Roth 401(k)
  • Life Insurance

Step 7 – Withhold State Payroll Taxes:

As you are done with Federal Payroll Taxes, now it's time to discuss State Payroll Taxes. The very first State Payroll Tax is State Income Tax charged by Montana State on employee's paycheck. Another one is State Unemployment Insurance (SUI) tax that is to be paid by the employers only.


Montana State Income Tax

Like Federal Income tax, Employers are required to withhold State Income tax from the employee's paycheck, at the rates ranging from 0% to 5.4%, distributed in 10 tax brackets depending only on Income Level, regardless of filing status.

All Filers
Montana Taxable Income Rate
$0 - $3,100 1.00%
$3,100 - $5,400 2.00%
$5,400 - $8,200 3.00%
$8,200 - $11,100 4.00%
$11,100 - $14,300 5.00%
$14,300 - $18,400 6.00%
$18,400+ 6.90%

This tax should be charged according to the details, including the number of allowances to claim, a number of dependents, additional state withholding amounts, etc. provided by the employee Form MW-4. Besides Form W-4, this form must also be updated regularly by the employee, especially on significant events like marriage, child's birth, or divorce.


Employees can claim Exemptions and Standard deduction from their State Income tax that would reduce their taxable income and increase their take-home pay. The maximum standard deduction rates are as follow:

Filing Status Maximum Standard Deductions (Annual)
Single $4,710
Married Filing Separately $4,710
Married Filing Jointly $9,420
Head of Household $9,420

State Unemployment Insurance (SUI) Tax

The State Unemployment Insurance (SUI) Tax is an employer-funded program that provides temporary income to unemployed workers who have lost their job without fault of their own.

The state doesn't charge in Montana State Disability Insurance (SDI) Tax. However, it does require the employers to pay Montana State Unemployment Insurance (SUI) tax, at the rate ranging from 0% to 6.12% on a first $34,100 earned in wages by each employee in a year. However, new employers are given relief as they only have to pay a rate ranging from 1% to 2.4%.


Step 8 – Withhold Local Payroll Taxes:

No city or county In Montana charges any Local Income Tax.


Step 9 – Calculate Pay Check:

Now that you are done with all payroll taxes and calculated the net take-home pay of an employee, it's time to cut the paycheck. Moreover, you, as an employer, must pay your portion of FICA tax along with FUTA and SUI tax in full and on time regularly.


Federal and Montana Payroll Laws:

  • Montana Law doesn't provide law about how frequently the employee must be paid. However, if there is no established payday schedule than the paydays are presumed to be semi-monthly. Moreover, employees are required to be paid within ten days after the pay period ends.
  • Professional, supervisory, or technical employees can be paid monthly.
  • The State requires the employers to pay at least the minimum wage rate of $8.65 to its non-exempted employees if the employer has the Annual sales above $110,000. However, if the sales are below the defined threshold, then they are allowed to pay the minimum wage of as low as $4 per hour.
  • The Montana state also requires the employers to pay overtime equal to the Federal FLSA law, where one and half of regular hourly rate must be paid to the non-exempted employee for each excess hour worked after forty hours in a workweek.
  • Following are some of the employees that are exempted from the State Minimum wage and State Overtime Law:
    1. Students who are working under a distributive education program.
    2. Babysitter, gardeners and sidewalk cleaners
    3. Immediate family members of an employer
    4. Persons with disabilities engaged in work (on certain conditions)
    5. Apprentices or Learners
    6. Employees of age under 18; they are allowed to be paid a Minimum wage rate not be less than 50% of the minimum wage rate.
    7. The bona fide executive, administrative, or professional employees
    8. Some other employees are also exempted that are mentioned on Montana State's Website.
  • Neither federal nor Montana state law that requires an employer to furnish a rest break (coffee break) or a meal break. However, if the employer is willing to provide, then it must be of at least 30 minutes in duration, and the employee must be completely relieved of duties.
  • In federal and Montana State law, employers are not required to provide employees with vacation benefits as well as sick leaves, holiday leaves, or bereavement leave, either paid or unpaid.
Also Check: Montana Sales and Reverse Sales tax Calculator to Calculate the amount of tax included in a gross price as well as the amount you should add to a net price.

FAQs

Answer: Montana has a progressive tax system with rates ranging between 1% and 6.9%, distributed into seven tax brackets, which are as follow:

  • 1% on the first $3,100 of taxable income.
  • 2% on taxable income between $3,101 and $5,400.
  • 3% on taxable income between $5,401 and $8,200.
  • 4% on taxable income between $8,201 and $11,100.
  • 5% on taxable income between $11,101 and $14,300.
  • 6% on taxable income between $14,301 and $18,400.
  • 9% on taxable income of $18,401 and above.

Answer: Following taxes are deducted from employee's paycheck in Montana – MT:

  1. Federal Income Tax: This tax is withheld for Federal, at the rate ranging between 0% and 37%, distributed in seven tax brackets depending on income level and filing status.
  2. FICA – Social Security: This tax is withheld for federal, at the rate of 6.2%.
  3. FICA – Medicare: This tax is withheld for federal, at the rate of 1.45%. Moreover, if the annual income crosses the defined threshold, then you are charged an Additional surtax of 0.9%.
  4. State Income Tax: This tax is withheld for Montana State, at the rate ranging between 1% and 6.9%, distributed into seven tax brackets, depending only on Income level, regardless of filing status.

Answer: The average livable wage for a single adult living in Montana is $11.38, for a single adult with one child is $24.61, and for a couple (one working) with three children is $29.02.

Answer: The Montana Minimum wage rate is $8.65 for Non-exempted employees and Tipped employees.

Answer: Tip earned while working in the food, beverage, or lodging industry is not taxable. However, it is taxable while working on other services.

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