Payroll Tax

Payroll Tax
The employer withholds a percentage from the employee’s payment and later transfers it to the federal government. This is called payroll tax and the percentage is usually 7.65%. It is designed to cover the costs of social security and medical expenses. In contrast, federal income tax directly goes into the general fund of the U.S. Treasury.
Sometimes payroll tax takes care of worker compensation as well. In some cases, local governments also collect payroll taxes, in order to satisfy their first responder, park, road maintenance, and other infrastructural development requirements.
Payroll tax is generated from wages, salaries, and tips of the employees. Employers deduct federal payroll taxes from the earnings of the employees and remit to the Internal Revenue Service (IRS).
Payroll tax is basically a regressive tax. Anyone earning a yearly income of $137,700 is subject to it. So, if you earn more than this amount, you do not need to pay it. For the first $132,000, employees pay 6.2% into Social Security and another 1.45% goes into Medicare on all wages.
Zakir CPA, PLLC is the best CPA firm in New York. We take care of your company’s payroll taxes. So you can keep your undivided attention towards your business and long-term goals. Our payroll tax experts are ready to pick your call.
We Solve Tax Problems: An Experienced, Friendly Tax Team in New York
Our primary focus is tax law, including matters such as state and federal tax debt, audits, investigations, and tax preparation. Local Texas clients will have the opportunity to meet face to face with a Zakircpa Office.