About Deductions

This estimate includes standard federal withholding, FICA taxes (7.65%), and state income tax rates applicable in COLORADO. Local county taxes are factored in where applicable.

Understanding Your Paycheck in COLORADO

When you receive a paycheck from an employer in the City and County of Broomfield, Colorado, a portion of your gross earnings is automatically withheld to satisfy federal, state, and payroll‑related obligations. The three primary categories of deductions are:

• Federal Income Tax: Based on your filing status, allowances, and the progressive tax brackets set by the Internal Revenue Service (IRS).
• State Income Tax: Colorado imposes a flat income‑tax rate on taxable wages earned within the state.
• FICA (Federal Insurance Contributions Act): This includes Social Security (6.2 % of wages up to the annual wage base) and Medicare (1.45 % of all wages, with an additional 0.9 % surtax on earnings over $200,000 for single filers).

Other optional deductions—such as health insurance premiums, retirement contributions, or union dues—may further affect your net (take‑home) pay, but the three items above are mandatory for virtually every employee.

Federal Tax Withholding

The amount of federal income tax withheld from each paycheck is determined by the information you provide on IRS Form W‑4. Your elections on the W‑4, including filing status, number of dependents, and any additional amount you request to be withheld, dictate the “withholding allowance” used by your employer’s payroll system.

The United States employs a progressive tax bracket system: as your taxable income rises, the marginal tax rate applied to each additional dollar also rises. For 2024, the brackets range from 10 % for the lowest tier up to 37 % for income exceeding $693,750 (single) or $828,250 (married filing jointly). By accurately completing the W‑4, you can align the amount withheld with your expected annual tax liability, helping you avoid a large refund or an unexpected balance due when you file your return.

State & Local Taxes

Colorado’s state income tax is a flat 4.55 % of taxable wages (as of 2024). This rate applies uniformly to all residents, regardless of income level, and is calculated after standard or itemized deductions are taken at the federal level.

Unlike some states, Colorado does not impose separate municipal or county income taxes. However, Broomfield does levy a modest sales tax and property tax; these do not affect payroll withholding. The only additional payroll‑related charge you might encounter is the Colorado Department of Revenue’s “state unemployment tax” (SUTA), which is an employer‑only expense and does not appear on your pay stub.

Maximising Your Take‑Home Pay

While you cannot eliminate mandatory withholdings, you can strategically reduce taxable income and fine‑tune your withholding to keep more money in each paycheck.

• Adjust Your W‑4: If you consistently receive a large refund, consider increasing the number of allowances or specifying an additional withholding amount that better matches your projected tax liability.
• 401(k) or 403(b) Contributions: Pre‑tax contributions lower both federal and Colorado taxable wages. For 2024, you can defer up to $23,000 ($30,500 if age 50 or older), directly boosting take‑home pay.
• Health Savings Account (HSA): Contributions to an HSA are also pre‑tax, reducing taxable earnings while providing a tax‑free way to cover qualified medical expenses.
• Flexible Spending Accounts (FSAs): Similar to HSAs, these accounts let you set aside pre‑tax dollars for dependent care or medical costs.
• Review Benefits Elections Annually: Life changes—marriage, a new child, or a side gig—may warrant a revised W‑4 or altered contribution levels.

By regularly revisiting your payroll selections and leveraging tax‑advantaged accounts, you can make the most of the Broomfield payroll calculator and keep more of each earned dollar in your pocket.