Payroll Taxes Questions and Answers Already Passed

Payroll Taxes Questions and Answers Already Passed What are payroll taxes? Payroll taxes are percentages withheld by employers from employee wages. Employers must withhold various employment taxes and, in states like WA or WY, workers' compensation insurance. What is included in employee payroll taxes? Employee payroll taxes include Social Security, Medicare, and income taxes. What is funded by Social Security tax? Social Security tax funds retirement benefits, benefits for dependents of retired workers, and benefits for the disabled and their dependents. What is funded by Medicare tax? Medicare tax funds medical benefits for individuals once they reach age 65. What is the collective term for Medicare and Social Security taxes? Medicare and Social Security taxes together are referred to as FICA (Federal Insurance Contributions Act) taxes. Who pays FICA tax? Both the employer and the employee contribute to FICA taxes. What percentages are used to calculate FICA on paychecks? For employees: - 1.45% for Medicare - 6.2% for Social Security For employers: - 1.45% for Medicare - 6.2% for Social Security When should FICA taxes be deposited? FICA taxes are deposited either monthly or semiweekly, along with federal income tax withholdings for employees. When is an employer considered a monthly depositor for FICA and federal income taxes? An employer is considered a monthly depositor if they reported $50,000 or less in taxes during the lookback period. New employers are also considered monthly depositors during their first year. When are deposits due for monthly depositors? Monthly depositors must submit the funds withheld from employee wages for the entire month to the IRS by the 15th of the following month.