Taxes are considered as the lifeblood of the government because without it, the government couldn’t get enough funding for the projects and other programs in the state. There are people who are subject to tax liabilities because of their annual gross income and they are required to pay their taxes on a regular basis. Depending on the income of self employed individuals and business owners, they are required to pay their tax liabilities accordingly. But for the employees, they can save themselves from a lot of hassle and inconvenience when it comes to paying their taxes on time because their tax liabilities can be automatically charged in a form of payroll taxes. Unlike requiring the employees to pay for the taxes on their own, payroll taces
When it comes to the taxes that can be subject to payroll tax, there are several types that are included in the coverage and these include the federal income tacx. This type of tax liability refers to the income tax of the employees which they can pay through their employers. The social security tax which is a percentage taken from the employee’s income is also another type of tax liability that can be subject to payroll tax. Aside from all these tax liabilities, the unemployment tax, state income tax and the city and county income tax can also be deducted straight from the employee’s pay. However, the payroll taxes of the employees vary from one state to another so it is important for you to check on the various terms and conditions in your own state.
Aside from all these tax liabilities, healthcare benefits of the employees can also be subject to payroll taxes and these include the medicare tax. The good thing about his tax liability is that it provides for an instant healthcare insurance coverage that the employees can enjoy.
Thanks to payroll taxes, there is now an assurance that every employee is compliant with tax laws since they can now pay for their tax liabilities directly through their employers. That means that the employers, through the payroll of their employees are given the right to deduct the tax contribution of every worker. In case the company fails to comply with such obligation, it will be charged with a penalty that is substantial enough to promote strict observation. That is why these days, most of the companies are already applying the payroll taxes for their employees so that it will be easier for them to comply with their tax liabilities. Upon the employment of the worker, there is a need to comply with the requirements and provide the forms that enable to companies to automatically deduct payroll taxes.