{"id":1127,"date":"2022-08-01T17:11:32","date_gmt":"2022-08-01T17:11:32","guid":{"rendered":"https:\/\/taxreliefprofessional.com\/?p=1127"},"modified":"2023-09-25T20:21:39","modified_gmt":"2023-09-25T20:21:39","slug":"what-are-payroll-taxes-a-guide","status":"publish","type":"post","link":"https:\/\/taxreliefprofessional.com\/filing-taxes\/what-are-payroll-taxes-a-guide","title":{"rendered":"What Are Payroll Taxes? A Guide"},"content":{"rendered":"\n
About 36 percent<\/a> of the federal government gets funded by employment or payroll taxes, while individual income taxes cover another 50 percent.<\/p>\n\n\n\n What are payroll taxes, who pays them, and what happens if you don’t? You might be familiar with them if you run a business, but some business owners neglect them thinking it’s up to the employee to make sure they get paid. But the government expects them to be taken out before distributing wages, leaving you with serious tax penalties if you haven’t been doing so.<\/p>\n\n\n\n Need some help understanding payroll tax and what you need to do? This guide will get you on track with understanding these important employment taxes.<\/p>\n\n\n\n These taxes are frequently called payroll taxes<\/a> since employers take them out of the payroll. It’s worth noting that the federal government calls these employment taxes and defines social insurance contributions as payroll taxes, but only on certain forms.<\/p>\n\n\n\n Payroll taxes get paid on wages, salaries, and tips to finance the federal government. There are four basic types to know about:<\/p>\n\n\n\n There might also be state and local payroll taxes deducted that go directly to those entities. Typically, these are income and unemployment taxes.<\/p>\n\n\n\n Income taxes go into the general fund, while FICA and MedFICA taxes fund social insurance programs like Social Security and Medicare. In all cases, the tax is a percentage withheld from pay by the employer, who pays it to the IRS on the employee’s behalf.<\/p>\n\n\n\n All payroll taxes are levied as a percent of income, so the amount paid by each person can be quite different. Other considerations like the employee’s withholding status can change what gets paid as well.<\/p>\n\n\n\n FICA is a flat 15.3 percent of earnings, covering 12.4 percent for Social Security and 2.9 for Medicare. Social security taxes are only levied on income up to the wage-base limit, which is $147,000 for 2022. Then there is an additional medicare tax of 0.9 percent for annual income over $200,000 or $250,000 if married and filing jointly.<\/p>\n\n\n\n The income tax percent varies depending on withholding status and income amount since the more an employee makes, the higher their tax bracket. Employers use the employee’s W-4 form<\/a> and the IRS withholding table to determine how much this should be.<\/p>\n\n\n\n Employers pay federal unemployment taxes and cannot deduct the cost from employee pay. The federal rate ranges from 0.6 to 6 percent depending on how much state unemployment tax the employer has paid. The tax funds unemployment insurance to cover benefits if someone gets laid off from their job.<\/p>\n\n\nWhat Are Payroll Taxes?<\/h2>\n\n\n\n
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How Much Are They?<\/h2>\n\n\n\n