Employers are responsible for several taxes related to their workforce, which include:
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Social Security Tax (SS): Social Security tax is collected under the Federal Insurance Contributions Act (FICA) and funds the Social Security program, which provides retirement and disability benefits to employees. Employers and employees both contribute to Social Security, with employers responsible for paying a portion of the total Social Security tax.
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Federal Unemployment Tax (FUTA): FUTA is a federal tax that supports unemployment benefits for workers who become unemployed through no fault of their own. Employers are responsible for paying FUTA taxes, which are not withheld from employees' paychecks.
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State Unemployment Tax (SUTA): SUTA is a state-level tax that funds unemployment benefits for eligible workers in the specific state where the employer operates. Employers typically pay state unemployment taxes, which can vary from state to state.
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Federal Income Tax (FIT): While employees have federal income tax withheld from their paychecks, employers are responsible for collecting and remitting these withheld amounts to the federal government on behalf of their employees.
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Applicable Local Taxes for Employers: In some cases, local governments may impose additional taxes on employers. The specific local taxes that employers may be subject to will depend on their business location and the local tax regulations.
Compliance with these employer payroll taxes is essential to ensure that employees receive the benefits and assistance they are entitled to, as well as to fulfill federal, state, and local tax obligations. The specific amounts and rates for these taxes can vary depending on various factors, including the employer's location and the wages paid to employees.