IRS Payroll Tax Laws

Employers are responsible for a number of taxes at the state and federal level, including Social security, Medicare, FUTA and SUTA. Social security and Medicare are withheld from the employee's check and paid to the federal and state government, along with FUTA and SUTA, or strict penalties ensue. Employers determine tax amounts using their employee's information listed on their W-4.

Social Security

Social security taxes are collected for retirees, disabled workers and their dependents. Employers must withhold 6.2 percent of an employee's pay for social security, and can only withhold taxes for a salary up to $102,000. For every dollar paid by the employee, the employer must match it.

Medicare

The Medicare tax provides medical benefits to working or retired seniors (65 and over) and their spouses. Employers withhold 1.45 percent of salary, with no salary limitations. For every dollar paid by the employee, the employer must match it.

FUTA

FUTA is a federal unemployment tax of up to 6.2 percent of wages that an employer must pay on behalf of their employee. Once an employee's wages reach $7,000, you are no longer required to pay FUTA.

SUTA

SUTA rates are paid by the employer on behalf of the employee. The rates vary, so contact your state's tax administration.

Depositing Taxes

An employer can opt to make federal deposits monthly or semiweekly, either online via the Electronic Federal Tax Payment System (EFTPS) or through an authorized financial institution.

Resources

• IRS Publication 15
• What are Payroll Taxes?