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#1 The Social Security tax rate is 6.2% of each employee’s wages.
What is the employer percentage of payroll taxes for Social Security? You will also pay 6.2% of the employee’s wages for this tax. The 2019 Social Security wage base is $132,900 ($128,400 in 2018). Continue withholding and contributing the Social Security tax portion until the employee earns $132,900 in 2019. After the employee earns $132,900 in gross wages, stop withholding and contributing to Social Security.
The deductible portion of the Social Security tax for employers is the employer portion ONLY. To calculate, take the gross wages paid (up to the wage base for the year) multiplied by 6.2%.
#2 The current Medicare tax rate is 1.45% of each employee’s wages.
You must also contribute a matching 1.45% as the employer. Unlike the Social Security tax, there is no wage base limit for Medicare taxable wages. There is an additional Medicare tax of 0.9% after an employee earns above $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). Only employees pay the additional Medicare tax.
The deductible portion of the Medicare tax for employers is the employer portion ONLY. To calculate, take the gross wages paid multiplied by 1.45%.
#3 Federal Unemployment tax
Also known as FUTA is paid only by the employer and is fully deductible. You can find the amount paid for the year on your Form 940.
#4 State Unemployment tax/State Unemployment Insurance
Also known as SUTA/SUI is paid only by the employer and is fully deductible. You can find the amount paid on the forms that you filed with the state.
#5 Federal Income tax
This is withheld from the employees’ pay and remitted to the IRS when you file the 941 forms. This tax is NOT deductible on your return.
#6 State income tax
This is withheld from the employees’ pay and remitted to the appropriate state on their behalf. Also, this tax is NOT deductible on your return.
Hopefully this answers your questions when it comes to determining these amounts. If you have any questions, please live chat us in the lower right hand corner.