what is payroll taxes
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What Is the Difference Between Payroll Tax & Income Tax? Both payroll taxes and income taxes are based on an employee's wages or salary. The difference is who pays. A payroll tax is paid at least partly by the employer, while income taxes are paid by employees. Federal payroll taxes are for Social Security, Medicare and unemployment insurance.
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What Is the Definition of the Term Payroll How to Do Payroll - An Overview. Payroll is for the most part an action that is performed by companies with employees. It's the process the company goes through to pay the employees. First, employees are hired to do a specific job at a specific rate of pay. Then, on a regular date determined by the company, these employees are paid.
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Pretax Payroll Deductions Pretax payroll deductions are qualified deductions that lower your employees' taxable wages. You subtract their contributions from their gross wages before figuring their tax withholding. Some pretax deductions reduce taxable wages for income tax; others reduce taxable wages for Social Security and Medicare taxes.
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Payroll Taxes Three main types of taxes fall under the category of payroll taxes: 1  The regular income tax that must be withheld from employees' paychecks. 2  Federal Insurance Contribution Act (FICA) taxes. 3  Federal Unemployment Tax (FUTA, the a stands for the word Act in the original name of the act). 4  State Unemployment Taxes. 5  Local Payroll Taxes.
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Federal Insurance Contributions Act tax Federal Insurance Contributions Act (FICA) tax /ˈfaɪkə/ is a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare —federal programs that provide benefits for retirees, the disabled, and children of deceased workers.he employer is also liable for 6.2% Social Security and 1.45% Medicare taxes, making the total Social Security tax 12.4% of wages and the total Medicare tax 2.9%.
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Employer Liability for Unemployment Taxes The Federal Unemployment Tax Act (FUTA) imposes a payroll tax on employers, based on the wages they pay to their employees. Unlike some other payroll taxes, the business itself must pay the FUTA tax. You do not withhold the FUTA tax from an employee's wages.
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Payroll tax Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee’s wages, and taxes paid by the employer based on the employee's wages.he economic burden of the payroll tax falls almost entirely on the worker, regardless of whether the tax is remitted by the employer or the employee, as the employers’ share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid.
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Payroll functions The Payroll function is a software application. Some companies use ‘off-the-shelf’ packages, some companies purchase customised software, while other companies develop their own payroll software (most typically large companies with in-house ITS department).
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Payroll A payroll is a company's list of its employees, but the term is commonly used to refer to: the total amount of money that a company pays to its employees. a company's records of its employees' salaries and wages, bonuses, and withheld taxes.
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Maryland County Tax Information for 2017 Payroll-Taxes.com is a free online resource featuring a compilation of research, collaboration and web tools for use by payroll professionals and more including information about California state tax, articles, federal tax information and state tax information.
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Payroll tax Income tax deductions from the payroll are voluntary and may be requested by the employee, otherwise employees are billed 2 mandatory income tax prepayments during the year directly by the tax authority (set at 1/3 of the prior year's final tax bill).
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Employee payroll tax and PAYG This is a tax paid on certain benefits employers provide to their employees or their employees' associates (typically family members) in place of, or in addition to, salary or wages. FBT is separate from income tax and is based on the taxable value of the fringe benefit.
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What Are Payroll Taxes and Who Pays Them? In summary, payroll taxes are a significant source of government revenue, but the burden of the payroll tax and the government programs they pay for may not be entirely apparent to taxpayers, due to how the taxes are levied.
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Payroll Terms The term Federal tax liability refers to the total employer obligation for social security (employee and employer portions) and Federal income tax on a pay-period basis. This obligation will be reported in the section of the Form 941 known as the record of federal tax liability (or ROFT).
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Payroll tax Federal social insurance taxes are imposed on employers and employees, ordinarily consisting of a tax of 12.4% of wages up to an annual wage maximum ($118,500 in 2016) for Social Security and a tax of 2.9% (half imposed on employer and half withheld from the employee's pay) of all wages for Medicare.
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An Employer's Guide to Payroll Taxes An Employer’s Guide to Payroll Taxes. Once a business grows large enough to hire employees, it must start withholding and remitting payroll taxes. These include federal, state and local income taxes, Social Security and Medicare taxes, and unemployment taxes. How do employers manage these payroll taxes? Which must be paid by employers and which must employers pay? And what if an employer takes on independent contractors or freelancers? While you should consult a professional tax advisor on payroll and tax-related matters, here are some basic concepts you should know: Getting Started
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What Is the Maximum Social Security Tax? The payroll tax is comprised of the Social Security tax, Medicare tax and additional Medicare tax for high-income earners — and it represents your Social Security contribution to your benefits payout when you retire. Keep reading to figure out how to calculate Social Security taxes.
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Everything You Need to Know About Payroll Taxes in 2018 Employee payroll taxes are usually made of these four taxes: 1  Federal Income Tax. 2  State Income Tax. 3  Social Security. 4  Medicare.
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Payroll Accounting (Explanation) Another part of payroll accounting involves the employees' federal income tax. An employer is required to withhold the federal income tax that an employee is expected to owe based on salaries or wages. The amount withheld, however, is rarely the exact amount of income tax that the employee will owe to the government.
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Federal Insurance Contributions Act tax Federal Insurance Contributions Act (FICA) tax /ˈfaɪkə/ is a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare —federal programs that provide benefits for retirees, the disabled, and children of deceased workers.or 2014, the employee's share of the Social Security portion of the FICA tax is 6.2% of gross compensation up to a limit of $117,000 of gross compensation (resulting in a maximum Social Security tax of $7,254).
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Payroll tax Federal social insurance taxes are imposed on employers and employees, ordinarily consisting of a tax of 12.4% of wages up to an annual wage maximum ($118,500 in wages, for a maximum contribution of $14,694 in 2016) for Social Security and a tax of 2.9% (half imposed on employer and half withheld from the employee's pay) of all wages for Medicare.
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Federal Insurance Contributions Act tax The Federal Insurance Contributions Act tax is a federal payroll tax imposed on both employees and employers to fund Social Security and Medicare —federal programs that provide benefits for retirees, the disabled, and children of deceased workers.
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U.S. Payroll Tax Deductions Under the authority of the Federal Insurance Contributions Act (FICA), these payroll taxes are collected to fund Social Security initiatives, including retirement and disability programs. The Social Security tax rate is 4.2 percent of an employee's wages for 2011.
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Federal Insurance Contributions Act tax The Federal Insurance Contributions Act tax is a United States federal payroll tax imposed on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, disabled people, and children of deceased workers. The tax also provides funds to the health care system for institutions that provide healthcare for workers that do not have health insurance and cannot afford healthcare treatment. Because the tax falls exclusively on wages and ...
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Payroll tax Payroll tax. Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee’s wages, and taxes paid by the employer based on the employee's wages. The first kind are taxes that employers are required to withhold from employees' wages, also known as withholding tax, pay-as-you-earn tax, or pay-as-you-go tax and often covering advance payment ...
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2017 U.S. Payroll Tax: What You Need to Know The payroll tax in the United States is also known as FICA, which stands for the Federal Insurance Contribution Act. Essentially, this is a tax paid by employers and their employees, to fund the Social Security (also known as Old-Age, Survivors, and Disability Insurance, or OASDI) and Medicare programs.