Payroll Tax Rates
Decoding Payroll Tax Rates: A Comprehensive Overview
Understanding Employee Payroll Taxes: Payroll taxes for employees encompass deductions extracted directly from an employee’s paycheck. These deductions comprise:
- Federal Income Tax
- State Income Tax
- Social Security
- Medicare
Employer’s Payroll Tax Contributions: On the employer’s side, payroll taxes consist of contributions towards:
- Federal Unemployment Tax
- State Unemployment Tax
- Social Security
- Medicare
Payroll Tax Rates in 2020: For the year 2020, the specific payroll tax rates are outlined as follows:
- Federal Unemployment Tax:
- Employer Contribution: 6%
- Employee Contribution: 0%
- State Unemployment Tax:
- Rates Vary by State; Consult Your State’s Department of Labor Website for Details
- Social Security:
- Employer Contribution: 6.2%
- Employee Contribution: 6.2%
- Medicare:
- Employer Contribution: 1.45%
- Employee Contribution: 1.45%
Note: State Unemployment Tax rates are subject to variation and can be obtained from the respective state’s Department of Labor website. Understanding these rates is crucial for both employers and employees to ensure accurate financial planning and compliance with tax regulations.