18663 Ventura Blvd, Suite 227Tarzana, CA 91356
FREE CONSULTATION818-436-2775
18663 Ventura Blvd, Suite 227Tarzana, CA 91356
FREE CONSULTATION818-436-2775
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Personal, Affordable Payroll Services, Bookkeeping, and Tax Processing for Small Business throughout Los Angeles County.

All About Payroll Taxes

One of the reasons payroll takes so much time is because you have to pay taxes. Allocating these taxes can be a complex process, especially if you are not familiar with accounting for payroll. Hopefully, the following information will help you understand what your business is responsible for when it comes to payroll taxes.

Employer Tax Responsibilities
Each paycheck, the employer is responsible to pay taxes to the government. These taxes are paid on the net pay that an employee receives. The net pay is what an employee receives after tax exempt deductions are made from his or her gross pay. These withholdings need to be reported to the government when the taxes are paid.

Employee Payroll Deductions
Employees also get taxed when they are paid. During accounting for payroll, the following deductions are usually taken:

  • Federal income tax
  • Medicare tax withholding
  • Social security tax
  • State tax
  • Local tax

Sometimes other taxes might be taken out of the paycheck. These might include disability, unemployment, community college, and other miscellaneous taxes. Federal income taxes and state taxes are deducted from an employee’s gross pay. They are determined by the total deductions that an employee declares on their W-4 form and the tax charts that the IRS uses. The employee and the employer pay social security taxes. They are also subtracted from the gross pay. Currently, employees and employers contribute over six percent to social security and almost one and a half percent to Medicare.

Processing Payroll
Since it is complex to allocate these taxes, many companies hire payroll experts to help them process payroll. This minimizes the stress involved with payroll. It also eliminates a lot of the risk involved. When a payroll company processes the checks, companies are less likely to have errors or get in trouble with the IRS.

If you need help with your payroll taxes, contact a payroll expert today. It is difficult to understand payroll taxes, and it makes sense to let someone help you with this aspect of your business.