Tax ObligationsYour Obligations made simple
This overview, though not comprehensive, will explain in easy to understand terms how to fulfill your payroll tax obligations. (Consult your legal or accounting professional for further understanding.) We will then show you how PayPreP.com will assist you in easily meeting these obligations. We will prepare and file all the forms for you. Your payroll taxes fall into two categories: Federal and State/Local.
Social Security and Medicare are the main items which must be withhed from your employees pay. These amounts are then 'matched' by you the employer and the entire amount is passed onto the IRS. You are liable for the entire amount due. See Our Services for how PayPreP.com will make this task easy for you.
If you pay your employee (or yourself, if self-employed) more than $1,700 during any calendar quarter of the current or preceding year, you must pay into the Federal Umemployment Tax Act (FUTA) for the entire year. This liability is also triggered if you employ someone in each of twenty or more calendar weeks of the current or preceding year. See Our Services for the entire range of requirements which PayPrep.com will fulfill on your behalf.
Each and every state of our union has different tax laws. In addition, some states have local jurisdictions with their own requirements. Not to worry. PayPreP.com supports them all.
Each state also has its own form of State Unemployment Insurance (SUI), which is usually an employer tax closely tied to FUTA. Rates are assigned by each state annually.
In addition, disability taxes and other obligations, like Workers' Compensation, may be required. See Our Services for further information on PayPrep.com's range of offerings.
On average, fulfilling your tax obligations will add about 15% to your total employee's gross pay. If you decide to 'pick up' your employee portion of social security and medicare to ensure no decrease in their take home pay, your total expenses can be expected to rise to just above 20%.