We develop a complete local theory for CR embedded submanifolds of CR manifolds in a way which parallels the Ricci calculus for Riemannian submanifold theory. In particular, we establish the subtle relationship between the submanifold and ambient standard tractor bundles, allowing us to relate the respective normal Cartan (or tractor) connections via a CR Gauss formula. The CR invariant tractor calculus of CR embeddings is developed concretely in terms of the Tanaka-Webster calculus of an arbitrary (suitably adapted) ambient contact form. This enables straightforward and explicit calculation of the pseudohermitian invariants of the embedding which are also CR invariant. These are extremely difficult to find and compute by more na��ve methods. We conclude by establishing a CR analogue of the classical Bonnet theorem in Riemannian submanifold theory.

Final version. 90 pages. To appear in Memoirs of the AMS