Article Categories

»	Arts & Entertainment
»	Automotive
»	Business
»	Careers & Jobs
»	Education & Reference
»	Finance
»	Food & Drink
»	Health & Fitness
»	Home & Family
»	Internet & Online Businesses
»	Miscellaneous
»	Self Improvement
»	Shopping
»	Society & News
»	Sports & Recreation
»	Technology
»	Travel & Leisure
»	Writing & Speaking

Reprint Article Code

Category: Articles » Business » Article » Article Code

Understanding Employee Taxes

Employee taxes can be one of the most difficult to understand areas of running a business and hiring employees. If you don't understand all of the complexities involving employee payroll tax, it can also get you into a heap of trouble. The first employee tax factor you should understand is what taxes you are responsible for as an employer. There are three employee taxes that you will be responsible for paying. The first is Medicare and Social Security tax. This is often referred to as FICA and provides welfare benefits funding for senior citizens. As an ... read more

Article Title:

Article Body:

The first employee tax factor you should understand is what taxes you are responsible for as an employer. There are three employee taxes that you will be responsible for paying.

The first is Medicare and Social Security tax. This is often referred to as FICA and provides welfare benefits funding for senior citizens. As an employer you are responsible for paying half of the FICA taxes and withholdings for your employee while the remaining half is withheld from their paycheck.

You are also responsible for paying federal unemployment tax. This tax funds the state unemployment benefits and the administrative costs associated with those benefits. It is important for you to know that you must pay federal unemployment tax on the first $7000 earned by each person you employ during the calendar year.

In addition to federal unemployment tax, you must also pay state unemployment tax. These taxes are based on the location and size of your business as well as the number of employees you employ. Due to the fact that each state operates its own unemployment program, these rates do tend to vary; so it's best if you check with your own state's unemployment division for specific details.

In addition to the taxes you must pay as an employer, you are also responsible for withholding employee tax. Even though this is the employee's contribution, it is your responsibility to handle the employee tax withholding. You will need to pay close attention to the employee tax form, or W-4, completed by the employee in order to know exactly how much money you need to deduct from the employee's paycheck. Usually the amount of money you must withhold will depend on the number of withholding allowances claimed by the employee, their marital status and any exemption from withholding taxes that the employee might claim.

It is very important that you stay on top of your employee's tax forms because they have the right to change them by submitting a new W-4. If an employee submits a new employee tax form, thereby changing the amount of their withholding and you fail to deduct the correct amount of money, you could be subject to penalties by the IRS.

You will need to deposit both the taxes that you are responsible for paying along with the employee tax withholdings in an authorized depository for Federal taxes. You can do this by either mailing or delivering your check or money order. These taxes will be due either semi-weekly or monthly. Your employee tax withholding due dates will be determined by the size of your payroll, dictated by the schedule. Usually, however; if your payroll is less than $2,500 every three months, you can file quarterly. If your employee taxes are larger, you'll need to file more often.

In addition to the employee taxes named above, recently there has been much discussion in the media regarding a proposed employee health tax. If instituted this tax would impose a $3000 tax on employers for each employee who is not covered by health insurance. The intend of the proposed bill is to force employers to cover more employees by health insurance; however critics of the bill claim that the proposed employee health care tax will only lead to more unemployment.

Author Bio:

Some other recently published business articles

Record Management by Ismael D. Tabije
Record Management is the practice of identifying, classifying, archiving, preserving, and sometimes destroying records. There is an International Standard on records management, ISO ...

Printing Business Cards in the Net by Florante Chok Cay
Nowadays, people are always in a hurry. Since our society is in a fast phase, the demands for faster services and products are high! ...

Treasure Hunts by John Tarr
Treasure hunts have proven to be an exciting opportunity for any corporate or retail team. Many corporations, restaurants, retail stores, ...

Processes used for Different Business Card Printing Services by Florante Chok Cay
Business cards have provided users with so much benefit with regards to advertising and marketing. They have always been good tools that are intended represent a company. Thus, making business cards ...

Team Building by John Tarr
Team building is very important in the corporate world. Therefore, it is very important for each company who employs large numbers of ...

Benefits Offered By Poster Printing Company by Florante Chok Cay
Since then, poster printing companies have provided high quality designs and prints to users. They have introduced many printing techniques and other ...

Publisher Guidelines

You may reprint this article electronically in your newsletter or on your website, free of charge.

If you reprint this article from our site, then you must keep everything intact. This includes the articles title, author name, articles body, authors bio / resource box, the links contained within the article, all copyright notices and the link pointing back to our site. All links within the article must also be made active / hyperlinks.