Understanding and computing payroll taxes is a complex task. Outsourcing payroll management or using an all-in-one intuitive AI-enabled platform like PeopleCentral may help significantly in payroll processing; however, as an employer, it is your responsibility to pay taxes. What is payroll tax? How to calculate payroll taxes? Which payroll taxes should the employees pay?
Get answers to some of these popular questions on how to calculate payroll taxes.
1. What is payroll tax?
Payroll tax is the amount of tax that either the employer or both the employee and employer is liable to pay as per federal, state or local regulations. For instance, income tax must be paid by the employee and the amount is withheld from the concerned person’s paycheck to pay for the tax amount. On the other hand, insurance contributions should be paid by both the employer and employee in equal ratios.
Always know the federal and state regulations regarding payroll taxes, and what is the responsibility of the employer and employee towards paying payroll taxes.
2. What is the current tax rate?
To compute payroll taxes, it is crucial to know the current rates for both federal and state taxes. Keep yourself up-to-date with the tax rates to understand what you are liable to pay, what is the employee’s responsibility, and how to calculate the taxes. PeopleCentral’s payroll solution is powered by Artificial Intelligence and aids in automated calculations.
3. Who are taxable?
Before calculating payroll taxes, it is important to determine how many workers are taxable. Whether your company has a permanent employee or independent workers, you need to know whether they are taxable and what are their responsibilities. For instance, contractual workers should pay their own taxes, while permanent employees are responsible for payroll taxes.
4. Where can I find help with calculating payroll taxes?
There are several aspects of payroll taxes and calculating the same can be extremely complex. If you need expert help with computing payroll taxes, PeopleCentral’s AI-enabled, intuitive payroll solution can help. With automated calculations, easy integrations, and round-the-clock support, payroll tax computation becomes fast and seamless with PeopleCentral.