Payroll Taxes

Learn more about keeping your business compliant with payroll tax requirements.

Which Payroll Deductions are Required by Law?

As an employer, you need to be familiar with payroll deductions that come out of your employees’ checks. Learn about mandatory vs voluntary deductions and more.

  • Are Your Workers Subject to Payroll Taxation?

    Payroll taxes involve a variety of difficult issues for the small business owner, which center around determining who is a taxable employee, what compensation is taxable, which payroll taxes apply, and when and how to make the tax payments.

  • Understanding Payroll Tax Payment and Filing Requirements

    Employers are required to make federal payroll tax payments to the government, as well as filing the proper reporting and informational returns. The rules can be complex and penalties for noncompliance severe, which is why the administration of payroll tax responsibilities is often outsourced by small businesses.

  • Protect Yourself When Outsourcing Payroll

    Using a payroll service can reduce the aggravation associated with your employment tax responsibilities, but you remain responsible for ensuring that the obligations are actually met.

  • Certain Severance Payments Are Not Subject to FICA Taxes

    FICA taxes are not due on severance payments that meet certain requirements, according to the Sixth Circuit Court of Appeals. Taxpayers in Kentucky, Minnesota, Ohio and Tennessee will want to see if the ruling applies to payments that they made or received.

  • Income Tax Withholding Reporting and Payment Rules by State

    Employers in the majority of states are required to file timely returns and make timely payments of withheld state income taxes.

  • What Compensation Is Taxable?

    'What Compensation is Taxable?' reports on the many types of compensation and how they are treated under payroll tax law.

  • Employers' Responsibility for FICA Payroll Taxes

    FICA, Social Security tax, Medicare tax, FICA withholding tax, payroll taxes, federal payroll taxes

  • Is Your Business Income Subject to Self-Employment Tax?

    Self-employment taxes are payroll taxes that small business owners are subject to and that carry varying payment and filing responsibilities depending on the form of the business.

  • Employer Liability for Unemployment Taxes

    To fund unemployment compensation benefit programs, employers are subject to federal and state unemployment taxes based on various factors. These factors include the amounts employers pay their employees, the type and age of the business, and the unemployment claims filed against the business.

  • Do You Have State and Local Payroll Tax Obligations for Your Employees?

    Employers in states with an income tax have state (and sometimes local) payroll tax withholding, payment and reporting obligations. Multistate employment withholding may be governed by reciprocal agreements between states. In addition, several states have mandated disability programs which impose payroll tax responsibilities on employers.

  • Determining Which Payroll Taxes Apply to Your Employees

    Employers face numerous payroll tax responsibilities which include withholding, paying and reporting federal, state and local income tax, Social Security and Medicare, unemployment taxes, and in a few states, disability insurance taxes. Federal income tax withholding requires employers to properly calculate the withholding amount from an employee's compensation, taking into account the employee's withholding exemptions claimed on IRS Form W-4.

  • Case Study: Allocating Tips to Employees in Large Food and Beverage Establishments

    Large food and beverage establishments must follow tip allocation rules in the absence of a good faith tip allocation agreeement between the business and its employees. The case study, Sydney's Seafood, illustrates this type of tip allocation procedure.

  • Employer Payroll Tax Obligations for Tipped Employees

    Employers with tipped employees have payroll tax withholding, payment, and reporting responsibilities for tips that are considered taxable compensation. Some employers will qualify as large food and beverage establishments and may be subject to special tip allocation and reporting rules.

  • Determining What Constitutes Taxable Compensation

    Compensation takes many forms: some types are subject to payroll taxes and some are not. Advances and loans, gifts, awards, and prizes, employee fringe benefits, business expense reimbursements, vacation and other time-off pay are among the types of compensation that you'll need to analyze in order to fulfill your withholding and payment obligations as an employer. In addition, special rules apply to noncash wages and payments for what is considered casual labor.

  • Is Your Worker an Employee or Independent Contractor for Payroll Tax Purposes?

    The classification of workers as employees or independent contractors determines whether an employer is responsible for withholding and paying payroll taxes. The worker's classification is based chiefly on whether you have the right to direct or control the worker's work. The IRS has a 20-factor analysis you can use to assist you in making a determination. There is also a safe haven rule, as well as the opportunity to request a ruling from the IRS as to employee or independent contractor status.

  • Income Tax: Withholding Payroll Tax Obligations by State

    Employers in states with an income tax have state payroll tax withholding obligations. Multi-state employment withholding may be governed by reciprocal agreements between states.

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