Calculate tax of payroll


The payroll tax is defined as the tax withheld by the employer and pay their employees based on the employee’s salary. Includes salaries, allowances, bonuses, commissions and benefits. United States of America, payroll taxes by the federal government and national. Before the idea of ​​the payroll tax and the calculations of the process, take a look at the tax and similar concepts.

Calculation of payroll tax

Salary is the period over which the employer pays wages compensation / to its employees. Once a worker has a salary, the employer deducted tax at that time, even if the employee has not worked for the entire period. For employees, the payment period shall be deducted on the basis of day period or otherwise. This means the number of days in the pay period, even on Sundays and holidays.

The first step in calculating the employer’s contribution is the calculation of gross salaries. Payroll tax is payable, covering all types of benefits and overtime. A summary of the amount of wages earned by the employee. Federal tax credits are deducted from the gross salary.

Legal deductions
Tax deductions on payroll deductions are required to:

Federal source (based on withholding tables in source code and other support mentioned in the publication 15 Circular E)
The tax rate on employees’ social security is 4.2% of payroll and tips received before 1 March 2012. For wages and tips received after 29 February 2012 tax rate is 6.2%
The rate of social security tax on employers is 6.2%.
The limit is $ 110,100 base salary, social security.
Medicare tax is 1.45% for the employee and employer. There is no limit to protect the tax base salary.
Refusal to state and local governments.

In some cases, you should check with the laws of tax breaks States.

DETENTION
Employer withheld federal income tax on wages and salaries of employees in form W-4 and head table.

It is mandatory for all employees to have the IRS W-4. W-4 will help you get the exact numbers for the collection of taxes. W-4 works as a calculator payroll tax. Tax laws can change over time, so you must have an updated version of Form W-4. This document is available on the official website of the IRS.
The amount of federal income tax deducted from the employee’s marital status and number of exemptions available. Employees fill out a form W-4, enter the number of exemptions.
The employer has deducted tax marital status and allowances claimed on Form W-4. These amounts are withheld pay the Internal Revenue Service (IRS) on behalf of the employee.

Comments are closed.