Paycheck Calculator Nebraska - NE

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Nebraska - NE Paycheck Calculator: Hourly and Salary

Nebraska, A Midwestern State of US, surrounding the panhandle's dramatic rock formations, the prairies of the Great Plains, and the towering dunes of the Sandhill. Lincoln, a vibrant university town, is the state's capital. In contrast, Omaha is Nebraska's largest city, which is also one of the major city hubs of the United States for historical, tourism, cultural and commercial businesses.

From vibrant art districts, great job opportunities, and a low cost of living to beautiful state parks and high school districts. Nebraska State as a lot to offer.

So if you are planning on moving to the Cornhusker State, due to new job offers or promotion or start a new business, this guide is just for you. Here are some of the essential points we are going to cover:

  • Things you must know before moving to Nebraska.
  • A detailed guide for Paycheck Calculation that will help you to:
    1. Compare different job offers in terms of take-home pay.
    2. Deduce the employment cost of different businesses to decide which business would be best to start.
    3. Calculate Paycheck amount while working in Nebraska as an employee for budgeting
    4. Calculate the Paycheck amount of each employee as an employer.
  • Federal and State Payroll Facts and Laws to make your paycheck calculation accurate and in compliance with the law.

Either you are an employer or employee, this guide is beneficial for both.

So let's get started.

Things You Must Know Before Moving to Nebraska

Relocating from one city, state, or country to another can be daunting. We have to consider many aspects before making any final decision. So if you are doubtful about your "moving to Nebraska" plan, then you must consider the following factors before making any decision:


Cost of Living

Living in Nebraska will cost you lower than most of the state in the United States, as the cost of living index is 89.1, which is significantly lower than the national index of 100. Cheaper housing cost plays a significant role in lower cost, whereas grocery, utilities, transportation cost is almost near to the national average. However, Health cost is relatively higher.


Cost of Housing

As we have said earlier, the low cost of housing is a significant factor in the overall lower cost of living in this state due to which the state ranks 4th for "housing affordability" across the nation by US News. The median home value is $157,800, and the median rent price in the state is $1,250. Wherefore, you won't find it challenging to get a beautiful, and affordable for you and your family in Nebraska.


Education

Nebraska has a collection of excellent public education institutes, private schools, colleges, and universities as well as quality community colleges, making the Cornhusker state comparatively good among the rest of the United States.

Some of the good quality educational institutions include Kahoe Elementary School, Dodge High School, University of Nebraska, and Bellevue University.


Weather

Nebraska has stable average temperatures with cold winters and hot summers but experiences numerous changes in precipitation and temperature throughout the seasons.

The state has two major climatic zones, where the West has a semi-arid climate, and the east has a humid continental climate.

Unfortunately, the also falls under the Tornado Alley. Therefore, it undergoes some of the highest numbers of tornados of any state.


Outdoor Activities

Nebraska is an almost flat state with a diverse climate and is one of the most unspoiled states in America. The Agricultural roots and the enchanting landscapes of Nebraska become love at first sight for adventurous at heart people. Some of the must-see sites in states include Henry Doorly Zoo in Omaha, Ashfall Fossil Beds State Historical Park, Omaha's Old Market, Nebraska Star Party, Valentine National Wildlife Refuge, Oregon Trail Days, Nebraska's Big Rodeo and the 300 feet into the sky landmark known as "Chimney Rock."


Business and Job Opportunities

Nebraska is home to five Fortune 500 companies, a welcoming population, a booming tech industry, and a rock-solid economy, for which it encompasses loads of business and job opportunities. The current unemployment rate in Nebraska is 2.8%, which is one of the lowest in the United States.

Omaha is one of the prominent contributors to the state's economy. It is also known as the real tech capital of America, as it is home to numerous tech companies and gives birth to about 20 tech startups each year. Web-development and computer numerical controller machinist are among the fastest-growing tech-related jobs in the Omaha and the state.

Apart from tech, Nebraska also has a booming industry of healthcare, agriculture, and the leisure & hospitality industry.


After reading all these earlier mentioned pros and cons, you must have finalized your decision to move to Nebraska. So, if you are sure to relocate, then you must continue reading to explore our main topic of "Paycheck Calculation."


Nebraska Payroll Facts:

  • Nebraska Residents are charged with Federal Income Tax, at the rate range between 0% to 37% distributed into seven tax brackets, depending on income level and filing status.
  • Both employer and employees are also required to pay FICA taxes that comprise for Social Security and Medicare Tax. Social Security is charged at the rate of 12.4%, and Medicare is charged at 2.9%.
  • The Nebraska State also levies a State income tax, at the rate range between 2.46% and 6.84%, having four tax brackets depending on income level and filing status. Supplemental Wages and Bonuses can be charged at a flat rate of 5%.
  • No city or county in Nebraska levies Local Income Tax.
  • Employers in Nebraska are also required to pay FUTA Tax to the Federal at the rate of 6% on the first $7,000 of each employee's taxable income.
  • The Nebraska State also requires the employers to pay State Unemployment Insurance (SUI) Tax, at the rate range from 0% to 5.4%, on the first wages of $9,000 earned by each employee in a year. However, new employers only have to pay a flat rate of 1.25%.
  • The Federal Minimum wage rate is $7.25 for non-exempted employees. Whereas the Cash Minimum wage rate is for Tipped Employees is $2.13, with the maximum tip credit of $5.12.
  • In Nebraska, the Minimum wage rate is $9 per hour. The Nebraska Cash Minimum Wage rate for Tipped employees is $2.13, with the maximum tip credit of $6.87.
  • Nebraska employers are required to pay time and half of regular hourly rate to their non-exempted employees for each excess hour worked after 40 hours in a workweek.
  • Nebraska doesn't have any reciprocal Agreement with any state, so nonresident employees in Nebraska are also required to pay taxes to the state.
  • Livable Wage in Nebraska for a single adult is $11.02, whereas for a couple (both working) with three children is $17.92. According to stats provided by Massachusetts Institute of Technology.
  • The Average Annual Salary in Nebraska is $66,720, that equals to the Average Hourly Rate of $32.
  • The Median Household Income in Nebraska is $59,116, according to United States Census Bureau.

As we are done with relocation to Nebraska 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 Nebraska, 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 Nebraska State on employee's paycheck. Another one is State Unemployment Insurance (SUI) tax that is to be paid by the employers only.


Nebraska 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 2.46% to 6.84%, distributed in four tax brackets depending only on Income Level and filing status.


Single Filers
Nebraska Taxable Income Rate
$0 - $3,230 2.46%
$3,230 - $19,330 3.51%
$19,330 - $31,160 5.01%
$31,160+ 6.84%
Married, Filing Jointly
Nebraska Taxable Income Rate
$0 - $6,440 2.46%
$6,440 - $38,680 3.51%
$38,680 - $62,320 5.01%
$62,320+ 6.84%

Married, Filing Separately
Nebraska Taxable Income Rate
$0 - $3,230 2.46%
$3,230 - $19,330 3.51%
$19,330 - $31,160 5.01%
$31,160+ 6.84%

Head of Household
Nebraska Taxable Income Rate
$0 - $6,020 2.46%
$6,020 - $30,940 3.51%
$30,940 - $46,200 5.01%
$46,200+ 6.84%

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 W-4N. 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 $6,900
Married Filing Separately $6,900
Married Filing Jointly $13,800
Head of Household $10,100

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 Nebraska State Disability Insurance (SDI) Tax. However, it does require the employers to pay Nebraska State Unemployment Insurance (SUI) tax, at the rate ranging from 0% to 5.4% on a first $9,000 earned in wages by each employee in a year. However, new employers are given relief as they only have to pay a flat rate of 1.25%.


Step 8 – Withhold Local Payroll Taxes:

No city or county In Nebraska 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 Nebraska Payroll Laws:

  • Nebraska Law doesn't define pay frequency, however, the law requires the employer to maintain regular paydays and notify the employee with 30 days prior notice for any changes in the payday.
  • Both Federal and State law requires the employer to pay at least the Minimum Wage rate to their non-exempted employees. The law also needs to pay the wage rate, which is higher among federal and state minimum wage rates. Therefore, the Nebraska Minimum Wage rate of $9 per hour, which is higher than the Federal Minimum wage of $7.25 per hour, must be paid.
  • Nebraska doesn't have overtime law. So employers are required to pay overtime according to FLSA Overtime Law that requires employers to pay overtime at time and half of the regular hourly rate to their non-exempted employees, for each excess hour worked after 40 hours in a workweek.
  • Following employees are exempted from both Federal and State Minimum Wage and Overtime Laws:
    1. Trainees of age under 25 are allowed to be paid the State Minimum Wage rate of $6 per hour for the first 90 days of employment.
    2. Bonafide administrative employees
    3. Bonafide professional employees
    4. Employees working in the Agriculture industry
    5. Babysitters
    6. An employee working in a non-profit organization
    7. An employee having their immediate family member as an employer
    8. There may be several other exemptions for which you must refer to the Federal and State official website.
  • Nebraska labor laws require the employee working in mechanical establishments, workshops, and assembling plants to receive a 30 minutes lunch break in each shift if a shift is eight or more hours long. Employees working in other industries are not required to obtain a meal or lunch break unless the employer volunteers it.
  • Neither Federal nor State law requires the employers to provide paid or unpaid leaves, including Sick leave, vacation leaves, holidays, or Paid Time offs (PTO benefits).

FAQs

Answer: Following are the type of taxes along with their percentages that are taken out of employee's paycheck working in Nebraska:

  1. Federal Income Tax: This tax is charged at the rate ranging from 10% to 37%, depending on income level and filing status.
  2. FICA – Social Security: This tax is charged at a rate of 6.2%.
  3. FICA – Medicare: This tax is charged at the rate of 1.45%.
  4. FICA – Additional Medicare: This surtax is charged at the rate of 0.9%, only if your annual income exceeds the defined threshold.
  5. State Income Tax: This tax is charged at the rate ranging from 2.46% to 6.48%, having four tax brackets depending on filing status and income level.

Answer: Nebraska follows the progressive income tax system, with its rates ranging between 2.46% and 6.48%, depending on the following tax brackets:

For "Single Filer" and Married, Filing Separately":

  • 46% on taxable wage between $0 and $3,230
  • 51% on taxable wage between $3,230 and $19,330
  • 01% on taxable wage between $19,330 and $31,160
  • 84% on taxable wage above $31,160

For "Married, Filing Jointly":

  • 46% on taxable wage between $0 and $6,440
  • 51% on taxable wage between $6,440 and $38,680
  • 01% on taxable wage between $38,680 and $62,320
  • 84% on taxable wage above $62,320

For "Head of Household":

  • 46% on taxable wage between $0 and $6,020
  • 51% on taxable wage between $6,020 and $30,940
  • 01% on taxable wage between $30,940 and $46,200
  • 84% on taxable wage above $46,200

Answer: One must file a Nebraska Income Tax Return if:

  • One is a Nebraska Resident and is required to file a federal tax return
  • One is a Nebraska resident and has at least $5,000 of net Nebraska adjustments to its federal adjusted gross income
  • One is a Part-Year or Nonresident of Nebraska having income from Nebraska sources.

Answer: The average Annual Salary in Nebraska is $66,720, that equals to the Average Hourly Rate of $32.

Answer: the Minimum wage rate in Nebraska is $9 per hour for non-exempted employees.

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