Payroll Taxes

Payroll Tax Basics

Payroll Taxes

Employers are required to make federal payroll tax payments to the government, as well as file informational returns. There’s a lot you should be aware of when it comes to payroll taxes.

 

Types of Payroll Taxes

There are typically four types of payroll taxes that you’ll notice on your pay stub: Federal Income tax, State Income Tax, Social Security tax, and Medicare tax. Most states (all states but nine states) require withholding a certain percentage of employee’s wages for state income tax.

 

Employee payroll taxes are usually made of these four taxes:

 

  • Federal Income Tax

  • State Income Tax

  • Social Security

  • Medicare

 

 

Employer payroll taxes are usually made up of these four taxes:

 

  • Federal Unemployment Tax

  • State Unemployment Tax

  • Social Security

  • Medicare

Federal and state income taxes are difficult to calculate. Federal income tax is determined by the Form W-4 that an employee submits, showing their filing status as well as their number of exemptions. An employee may claim less exemptions and withhold more than legally required and will receive a refund when filing his/her annual tax return. You will need to reference IRS Publication 15B, Section 17: How to Use the Income Tax Withholding Table to see how much tax to withhold from your employee. Please note, this tax table gets updated annually by the IRS. The IRS has a calculator that help identify your correct tax withholding amount  to make sure you have the right amount of tax withheld from your paycheck at work.

State and local tax revenue divisions are looking to maximize their sales tax collections. We can help you understand and manage your payroll tax obligations and submit all appropriate tax withholding in an efficient and timely manner.  Call us at (212)-320-8191. You may also email us at Info@urgenttaxservices.com