As an employer, you must also pay a matching amount of FICA taxes for your employees. You are required to withhold 6.2% of an employee’s wages for social security taxes and to pay a matching amount in social security taxes until the employee reaches the wage base for the year.

What are the payroll taxes expensed by the employer?

Employer Payroll Taxes Social Security taxes of 6.2% in 2020 and 2021 up to the annual maximum employee earnings of $137,700 for 2020 and $142,800 for 2021. Medicare taxes of 1.45% of wages2 Federal unemployment taxes (FUTA) State unemployment taxes (SUTA)

Why do employers have to match payroll taxes?

The employer FICA match is a requirement for an employer to remit to the government double the amount of social security and Medicare taxes withheld from employee pay. This means that the employee is paying half of the amount remitted, and the employer is paying the other half.

How are payroll taxes calculated for an employer?

Your payroll tax liability varies based on the number of employees you have, how much you pay those employees, and where your business is located. If you want to know how much your payroll tax liability is, familiarize yourself with how to calculate payroll taxes for employer share below.

Is it illegal to withhold payroll taxes from employees?

Withholding the employer portion of payroll taxes from your employees’ wages is illegal. And, failing to pay your employer tax liability can lead to IRS penalties. So, are you ready to dive into your employer payroll tax responsibility? Payroll taxes are mandatory contributions that both employees and employers make.

Is the employer required to file a payroll tax return?

But the employee portion of Social Security reverted back to the full 6.2 percent in 2013. Employers are required to report their payroll tax obligations and to deposit payroll taxes in a timely manner. Reporting requirements include: Making federal tax deposits. Annual federal unemployment tax return (Form 940 or 940EZ).

What are the responsibilities of an employer for paying taxes?

1 Paying the employer’s share of payroll taxes 2 Depositing tax dollars withheld from the employees’ paychecks 3 Preparing various reconciliation reports 4 Accounting for the payroll expense through their financial reporting 5 Filing payroll tax returns