Payroll Tax Rates, Filing Deadlines and Responsibilities in 2019

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• PAYROLL TAX RATES, FILING DEADLINES
  RESPONSIBILITIES IN 2019

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Payroll Tax
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• What Are Payroll Taxes?

To put it simply, payroll taxes are any taxes
paid on the wages and salaries of employees and
this include income tax withholding, social
security and Medicare taxes, federal and state
unemployment taxes, and state and local payroll
taxes. Payroll taxes are used to finance social
insurance programs, such as Social Security and
Medicaremaking it the second largest source of
government revenue in the United States.
PAYROLL TAX
Luckily, paying and filing small business taxes
arent as intricate as they seem. All you need is
to understand the payroll taxes types, and the
filing and payment deadlines. Here is a detailed
guide on everything you need to know about
payroll taxes including the current rates and
filing deadlines.
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• Federal Payroll Taxes

These are the three main types of federal payroll
taxes
Federal Income Tax Withholding
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An employer from an employee paycheck deducts
Federal Income tax withholding. The tax amounts
withheld are regulated by federal income tax
tables, the pay rate, and the exemptions claimed
by the employee on the W-4 form.
Federal Insurance Contribution Act (FICA) Taxes
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These tax are used to fund the Medicare and
Social Security Programs and paid by both the
employer and the employee. The employers are
required to withhold the FICA taxes from an
employees paycheck and report to the IRS along
with their FICA taxes as well.
Federal Unemployment Tax Act (FUTA)
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The employers paid the FUTA taxes and these are
used to fund unemployment compensation benefits
that unemployed people receive.
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• State Local Payroll Taxes

State and local governments are also have payroll
taxes just like the federal government. Their
payroll taxes include state income taxes and
state unemployment taxes (SUTA). These are the
three main types of state and local payroll taxes
State Unemployment Tax Act (SUTA)
Other State and Local Payroll Taxes
State Income Tax Withholding
Every employer is require to pay unemployment
taxes at the state level. With a regular timely
payments record for SUTA taxes, employers have
the opportunity to claim credit that lowers their
FUTA taxes.
Apart from few states, every state is require to
have their employers to withhold state and local
income taxes from their employees wages. The
states that do not impose a personal income tax
includes Alaska, Florida, Nevada, South Dakota,
Texas, Washington, and Wyoming are among the
States that dont have an income tax legislation.
New Hampshire and Tennessee States do levy a tax,
but only on dividend and interest income.
There are other State and Local payroll taxes as
well and these vary by location. Payroll taxes
might include disability insurance payments,
family leave payments, etc.
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• How Much Are Payroll Taxes in 2019?

Here is an overview of the rates of payroll taxes
in 2019, including who will pay them and the
applicable wages on which the tax applies
Payroll Tax Employee Pays  Employer Pays  Total  Applies To
Federal Income Tax 10 to 37 None 10 to 37 All wages
State Income Tax 0 to 13.3 None 0 to 13.3 All wages
Social Security Tax 6.2 6.2 12.4 Wages up to 132,900
Medicare Tax 1.45 1.45 2.9 All wages
Medicare Surtax 0.9 None 0.9 All wages
Federal Unemployment Tax None 6 6 Wages up to 7,000
State Unemployment Tax Varies Varies 1 to 3.7 Varies
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• Payroll Taxes in 2019

While calculating payroll taxes, all supplemental
wages are also considered including salaries,
tips, bonuses, commissions, extra work pay, and
accrued sick pay. There are different options for
withholding taxes on supplemental wages from the
IRS. An employer can either consider them as
regular wages or withhold a flat tax separately
from them. For supplemental wages more than 1
million annually, the flat tax rate is 37 and
22 for supplemental wages of 1 million or less.
Apart from these payroll taxes, employers are
required to pay business taxes file a tax
return separately.
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Payroll Taxes Explained

• Income Taxes
• Federal Insurance Contributions Act (FICA)
  Payroll Taxes
• Federal Unemployment Tax Act (FUTA) Payroll Taxes

Heres a detailed overview of the different types
of federal and state payroll taxes.
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Income Taxes
Income taxes are usually paid on the earnings of
companies and individuals. The earnings can be
from any sources including wages, salaries,
dividends, interest, royalties, rents, and sales.
These taxes usually fund defense and national
security programs and are withheld by the
employers based on the taxpayers W-4 withholding
form. When the taxpayer file a tax return, the
filer either pay any remaining balance or receive
a tax refund. There are different tax brackets
based on income stream. A higher income entitled
to a higher tax rate and each taxpayer falls into
a federal tax bracket. There are seven tax
brackets in 2019 based on earnings and filing
status10, 12, 22, 24, 32, 35, and 37.
These taxes vary from state to state, but most
states have a progressive tax system. California
has the highest state income tax rate of 13.3
with annual wages of 1 million or higher.
Filing for federal income taxes can be an
intimidating process, but there are income tax
calculators and collaborating softwares like
TurboTax, TaxSlayer or HR Block that can help
ease the income tax filing process.
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• Federal Insurance Contributions Act (FICA)
  Payroll Taxes

FICA taxes paid by employers and employees and
are used to fund the social security and Medicare
programs. These taxes comprise of three different
taxes
Highly paid employees at pay taxes at 0.9 in
Medicare surtax. Once an employee wage reaches
200,000, the employers must withholding this tax
from an employees paycheck. The employee might
receive a refund based on its total combined
income and filing status. There is no employer
share for the Medicare surtax.
Medicare Surtax
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Federal Unemployment Tax Act (FUTA) Payroll Taxes
FUTA taxes are used to fund compensation programs
for the unemployed. Only employers pay FUTA and
SUTA taxes and not withhold from an employees
paycheck. The rate of these taxes is 6, and it
applies to the first 7,000 that an employee
receive annually. This puts the maximum FUTA tax
at 420 per employee annually. The tax rates
vary from state to state significantly. There is
federal government grants of 5.4 for employers
who pay timely SUTA taxes in full, bringing the
effective FUTA tax rate down to 0.6. Ths states
that fall under the credit reduction state are
exempted from this. In 2019, only the U.S. Virgin
Islands could be a credit reduction state.
Freelancers on independent individuals are
exempted from FUTA or SUTA taxes, and arent
eligible to obtain unemployment benefits.
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• Employer PayrollTax Responsibilities

Calculate and report own share of payroll taxes
to federal, state, and local authorities
The responsibilities of employers is to calculate
employees gross monthly wage earnings and
different payroll deductions to ascertain the net
pay. Apparently, it seems simple but calculating
the payroll deductions necessitate you to be
detail-oriented and accurate while making the
calculations. The employer responsibilities for
payroll taxes include the following
Calculate the employee share of payroll taxes to
federal, state, and local authorities
File the payroll tax returns in accordance with
deadlines
Provide tax records to employees and independent
contractors, such as the W-2 Form and 1099-MISC
Form
Account for payroll expenses while balancing your
books
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Business
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• Tax Deadlines Filing Requirements

IRS has specific guidelines for payroll tax
guidelines, which illustrate you have to deposit
your payroll taxes during the year and report
them on the applicable tax forms. Here are the
essential tax deadlines and tax forms that you
need to know for payroll tax.
FICA Tax and Income Tax Filing Requirements
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Due April 30, for the period Jan. 1 to March 31
Due July 31, for the period April 1 to June 30
Due Oct. 31, for the period July 1 t Sept. 30
Due 31, for the period Oct. 1 to Dec. 31
Generally, you shouldnt make any tax payment
with Form 941. Instead, deposit the FICA taxes
separately and withheld income taxes that you
report on Form 941. Make the deposit on The
Electronic Federal Tax Payment System (EFTPS).
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FUTA Tax Filing Requirements
Youll have to complete and file IRS Form 940 to
report FUTA taxes and the filing deadline is
January 31, but extended to February 10 for those
who deposited their FUTA taxes promptly. The
quarterly deadlines for depositing your FUTA
taxes are April 30, July 31, Oct. 31, and Jan. 31
(same as for Form 941). For FICA taxes, deposit
the FUTA taxes on EFTPS. If the FUTA tax
liability is lower than 500 in a year, you can
include payment along with Form 940 rather
depositing the taxes on a quarterly basis.
Employers are also required to file quarterly
salary detail reports to record SUTA amounts at a
state level.
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• Employee Tax Responsibilities

Provide accurate withholding tax information on
Form W-4
Make the needed changes in the Form W-4 according
to changes in the employees tax exemptions
Frequently review of paystubs, and make sure the
employer is making the right deductions.
Inform the employer if you dont receive a W-2 by
early February
File payroll taxes before April 15
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Know the Rules Stay One Step Ahead
Filing for payroll taxes can be intimidating with
so many taxes, rules, and deadlines. If you feel
like drown yourself with the tax filing process,
ask for help from a payroll software or a tax
expert to automate calculations, withholdings,
deposits, and reporting taxes on your behalf.
If still essential to understand why you should
pay taxes and how this money is being used to
fund. In addition, even if you get help from a
software or a tax expert, the accountability for
any mistake will always be yours. There will be
penalties for late payments and not to mention,
these mistakes can effect employees self-esteem
and employing efforts. But, if youre prepared
will and understand all the relevant rules and
numbers for payroll taxes, the chances of making
mistakes will be lower and gaining more benefits
will be higher.
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