Payroll Taxes

Figuring out payroll taxes is a critical but time-consuming task that comes with owning a business. Small business owners are responsible for managing federal and state taxes. There is no room for error, as mistakes and late payments come with hefty penalties.

Federal Taxes

Employers are responsible for depositing and reporting the following taxes:

  • Federal Income Tax: Employers withhold this tax from their employees’ paychecks. It has a marginal rate of 10.0% to 39.6%, depending on the total income.
  • Social Security: Employers withhold this tax from their employees’ paychecks. It provides survivor benefits, disability payments, and retirement income.
  • Medicare: Employers withhold this tax from their employees’ paychecks. It provides health insurance to people over age 65 and to some younger people with disabilities.
  • Federal Unemployment Tax: Employers pay this tax, which provides temporary financial assistance to workers who have lost their jobs.

State Taxes

Small businesses in the state of California with one or more employees have an obligation to register with the state as an employer and to pay state payroll taxes. California employers pay some taxes, while others are withheld from employees’ paychecks. Employers are responsible for calculating the appropriate amount and making payments to the state on time.

Here is some information regarding the four types of California state payroll taxes:

  • Unemployment Insurance Tax: Employers pay this tax, which provides short-term financial support to people who have lost their jobs. New employers pay a rate of 3.4% and established employers pay a rate of 6.2%. on the first $7,000 of an employee’s wages.
  • Employment Training Tax: Employers pay this tax, which provides funds for training. The rate is 0.1% on the first $7,000 of an employee’s wages.
  • State Disability Tax: Employees pay this tax, which provides financial support for non-work-related disabilities, including leave to care for family members. The rate is 1.0% on an annual income of up to $122,909.
  • Personal Income Tax: Employees pay this tax. California has a progressive income tax, which means that people who make more money pay a higher tax rate.

How Expert Payroll LLC Can Help Your Small Business

Keeping track of the withholdings, deductions, and various due dates for state and federal taxes is a serious undertaking. Employers are responsible for filling out and keeping track of the many forms associated with these taxes and making payments on time throughout the year.

Handling these responsibilities is a full-time job in and of itself. If you don’t have a payroll expert on staff, chances are that you, as the business owner, are handling payroll in addition to many other aspects of your business. Outsourcing payroll taxes can relieve you of that burden.

Expert Payroll LLC can take care of all state and federal tax responsibilities for your business. Our payroll professionals are experts in this field. Let us focus on your taxes so that you can focus on the parts of your business that you know best.

We can:

  • Provide and maintain tax forms
  • Calculate state and federal taxes
  • Make on-time tax payments

Call Expert Payroll LLC today to learn more about our payroll tax services.

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