Knowing how to calculate payroll taxes is a big advantage for businesses and employees alike. This tax is a huge help to the government as it is used for numerous purposes. Having basic knowledge regarding this will help you understand where your money goes.
In a nutshell, this amount is paid by the employer by taking a portion from the wages of the worker. Under this tax are the social security and Medicare, income tax and unemployment tax. All of these are subtracted from the wages of the employee in order to help the government and also grant insurance benefits to the employee.
Every region pays the same federal tax but differs when it comes to the state tax. It is vital that one knows the rate in their area. Employees should know this information so that they can dispute any excessive deductions on their salary. Employers, on the other hand, need to know this as they are the ones who pay the government. It would be unwise to pay the incorrect amount as you might end up with a fine.
A good thing about this mandatory tax is that both employee and employer enjoy insurance in the form of social security and Medicare. Social Security will greatly benefit the employee when he retires. It will also benefit the family of deceased or disabled workers. While the employee is still employed, he enjoys hospital insurance benefits courtesy of Medicare.
Less than ten percent of the tax collection goes to various workforce agencies. These agencies are tasked to help the unemployed people. They accomplish this by holding seminars and job forums and also giving unemployment checks.
The task of collecting payroll taxes falls upon the IRS. It is their job to check the various small and big-time businesses to see if they pay the right amount. Those caught cheating are usually fined. Late payment also incurs a hefty penalty.
In a nutshell, this amount is paid by the employer by taking a portion from the wages of the worker. Under this tax are the social security and Medicare, income tax and unemployment tax. All of these are subtracted from the wages of the employee in order to help the government and also grant insurance benefits to the employee.
Every region pays the same federal tax but differs when it comes to the state tax. It is vital that one knows the rate in their area. Employees should know this information so that they can dispute any excessive deductions on their salary. Employers, on the other hand, need to know this as they are the ones who pay the government. It would be unwise to pay the incorrect amount as you might end up with a fine.
A good thing about this mandatory tax is that both employee and employer enjoy insurance in the form of social security and Medicare. Social Security will greatly benefit the employee when he retires. It will also benefit the family of deceased or disabled workers. While the employee is still employed, he enjoys hospital insurance benefits courtesy of Medicare.
Less than ten percent of the tax collection goes to various workforce agencies. These agencies are tasked to help the unemployed people. They accomplish this by holding seminars and job forums and also giving unemployment checks.
The task of collecting payroll taxes falls upon the IRS. It is their job to check the various small and big-time businesses to see if they pay the right amount. Those caught cheating are usually fined. Late payment also incurs a hefty penalty.
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