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Employer's Payroll Tax Liabilities

7 May, 2015 - 17:00

Employers can be subject to both federal and state taxes based on the amount of compensation paid to their employees. FICA taxes by the employer are equal to the payments made by an employee. Federal Unemployment Compensation Tax is levied on employers only, and the funds collected are used to provide a temporary relief to individuals unemployed as a result of economic forces beyond their control. State Unemployment Compensation Taxes are paid by employers only.

INCOME TAXES

Most employers are required to withhold federal income taxes. State and local income taxes do not exist everywhere. In areas where they do exist, state/local income taxes should also be withheld. Factors that influence the amount of income tax deductions are: gross pay, estimated deductions, exemptions claimed, and marital status.