Almost everybody has to pay taxes. People pay taxes to their government because they need that money to run the country in addition as the government itself. The people who pay taxes especially those who work, have a business or have their own company have to have a way of managing them.
One of the most tiring jobs is making a payroll for you should not have errors when you make it, it should be accurate and you should finish it on time so your employees can get their pay with no delays.
One of the processes in making the payroll is the deduction of the necessary taxes that is needed to be deducted on the employees’ salary. This tax is automatically deducted from their salary. Before computers, companies calculated their payroll manually.
But, that is why there were some discrepancies such as error in calculating the employee’s salary, or it may also be that the company was delayed in releasing pay. Errors like this sometimes occur since nobody is perfect, people make mistakes. But now that people are fond of computers there are software programs that are made and are being developed to help companies make their work easier.
For example, payroll tax software. This software helps companies deduct the right amount of taxes on their employees wages precisely and with less errors. Here are the taxes that are usually deducted from salaries.
First the employees are required to fill in a federal tax form, and then the company should consult the IRS withholding table to see what amount of taxes should be withheld from the employees’ gross pay. This amount varies on the number of his exemptions, income and filing position.
State income tax is deducted in the worker’s salary, and the state tax laws vary by state. The amount will depend on the employees filing position, state laws, and dependent amount. Almost all state requires taxes to be withheld but there are some who does not.
Social security taxes are also deducted in your pays this tax includes your employees FICA and Medicare. But FICA has a maximum amount for the whole year which you will meet and ones you have reach that amount before the year ends then your salary will not need deduction from FICA that year.
As an employer you need to keep the needed and the necessary documents in a safe place, for in case one of your employees have questions regarding their tax then you have documents on your hands. You also need to double check the W2s of your employees at the end of the year see to it that the withheld during the whole year is reflected on the W2.
Taxes that are withheld vary in every state so to be sure I suggest you go to your states department of labor to know the laws of your state tax. This is also so that you’ll know the necessary taxes that would be deducted on your wage.