What are payroll taxes?
Payroll taxes are taxes that employers are required to withhold from their employees' paychecks and pay to the government on their behalf. These taxes are used to fund various government programs, such as Social Security and Medicare.
How are payroll taxes calculated?
Payroll taxes are calculated as a percentage of an employee's wages. The two main types of payroll taxes are Social Security and Medicare taxes. Social Security tax is currently 6.2% of an employee's wages, up to a certain amount, while Medicare tax is 1.45% of an employee's wages, with no limit on the amount of wages subject to the tax.
What is the difference between payroll taxes and income taxes?
Payroll taxes are separate from income taxes. While payroll taxes are paid by both employers and employees, income taxes are paid only by employees. Income taxes are based on an employee's total income for the year, while payroll taxes are based only on an employee's wages.
Can employers be held responsible for not paying payroll taxes?
Yes, employers can be held responsible for not paying payroll taxes. If an employer fails to withhold payroll taxes from their employees' paychecks or fails to pay the taxes to the government, they can be subject to penalties and fines. In some cases, employers can even face criminal charges for failing to pay payroll taxes.
Nick Simpson
Founder @ WorkMade
I started working for myself at 9. My first tax bill showed up at 14. I didn’t understand it, and nobody around me could really explain it. If you’ve been there, you get it. Twenty years later, after creative directing for brands in New York and buying and selling a few companies, I kept seeing the same thing: smart, talented people losing money to a system that wasn’t built for how they work. That’s why I built WorkMade. Not to make taxes “easier to understand” but to make them disappear into the background, so you can get on with your life.