As an employer, you are expected to know much about employees tax and the different kinds and types of it. It is as well a friendly reminder to all employers out there that it is an obligation they are entitled to provide and paid to their respective employees when due.
The Federal Income Tax
All employers are required to withhold such tax from their employees who are determined by the W-4 form which every newly hired employee is required to sign and fill the form upon the hiring process.
The Social Security and Medicare
All employees are as well required to deduct such tax from their employees’ salaries and wages. The social security deduction is 6.2 percent while the Medicare is 1.45 percent to the gross pay. Both amounts must be matched by the employers’ contributions.
The Worker’s Compensations and Benefits
Employers must never overlook this area of responsibility. This is where the funds for sick and ill employees are being got when unfortunate accidents or inevitable instances occur during the work or within the workplace of such employees.
The Federal and State Unemployment Tax
Such tax is as well required for the employers and employees set up. The employers pay for employees who are damaged by unemployment or who lose their jobs in the process of layoffs and such actions done by the company to take actions for unfortunate events which may come through in the process. There are instances when such situations happen, and we could never blame anyone when such things are inevitable and cannot be avoided from happening. When things happen, all we are left to do is to accept it, face it and take immediate and appropriate actions for it.
Thus, before setting up your payroll system and hiring an employee for the job you’ve been thinking that needs to fill up, you first need to think and learn about the employment tax. The importance of this in the employer and employee and how it functions and work for you. There are different types of it which can be very daunting for you to understand and comprehend especially when you are still a beginner in the field and not very particular and yet to familiarize the terms and how much works. Sometimes, this can be scary to some who do not have prior knowledge of business and taxes. This is understandable; however, please do not let this overwhelm your desire to put up your own dream business.
Remember never to be afraid nor get intimidated by the fact that you don’t have enough knowledge nor a solid background about it. As long as you’re persistent and patient enough in learning these things, then that is all that it takes. Learn the necessaries needed especially on employment taxes. It is essential because your employees play an essential role in making your business successful. They are considered to be an asset to your business, and when talking about assets, it needs to be protected, well taken care of and given exceptional attention and focus.