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Employer Payroll Taxes - The Importance of Paying
from: www.TaxesExposed.comAre you planning on beginning your own business? If so, it is good to find things out about the business beforehand so that you do not make any costly rookie mistakes. After all, some people who begin fresh often lose their businesses if they do not handle things properly. Some even end up paying hefty fines and going to jail over their mistakes. To make sure this does not happen to you, you should learn as much as possible.
One of the things that you need to know very well is the taxes that you will need to pay. For example, most new business owners do not realize that they will have to pay some of the payroll taxes. They assume that it all just gets taken out of their employee’s paychecks. Well, that is wrong. In reality, your company is responsible for paying half of the FICA taxes. If you do not you could be in quite a bit of trouble. These are the employer payroll taxes that you must pay in order to be a legally sound company.
The FICA taxes are very specific. It is the employer payroll taxes for both social security and Medicare. When it comes to social security, you are allowed to withhold 6.2% of your employees’ earning. That portion will go toward paying that tax. Then it is up to you to pay an additional 6.2%. Essentially, that means that both you and the employee are taking equal responsibility in paying that tax. Then, with Medicare, you each pay 1.45% separately. In other words, your portion of the FICA employer payroll taxes will equal 7.65%. This is what your business is responsible for when it comes to all of your employees. You need to do this for each of them.
How much of the employer payroll taxes have a lot to do with how much you pay your employees and how many employees you have to begin with. The bigger your company is, the more you will pay in these taxes. This is necessary and a good thing for your company.
To make sure that you are paying the right money in employer payroll taxes and that you are taking the right amount of taxes out of your employees’ checks, you should use a combination of software programs and accountants. This is especially the case when you have a large company that has many employees. The more employees you have, the more likely you are to make a mistake with the calculations in regards to taxes. Since this can cause a lot of problems, it’s better to get them right the first time.
Christine Gray is a recognized authority on the subject of Online Taxes. Her website Taxes Exposed provides a wealth of information on everything you will need to know about Payroll Taxes. All rights reserved. Articles may be reprinted as long as the content and links remains intact and unchanged.
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