In this answer Payroll tax is an unavoidable part of running a business in the United States. If you want to legally employ people, you’re going to need to pay payroll tax. There’s no way around that.
Today, I’m going to explain the intricacies of payroll tax. I’ll show you the best ways for a business to manage its payroll taxes, reduce errors, and increase bookkeeping efficiency.
What Is Payroll Tax.
Payroll taxes consist of two types of taxes employers are required to pay:
- Withholding taxes, which are taxes employers are required to withhold from the wages of every employee. These are also known as Pay-As-You-Earn (PAYE) taxes.
- Other employer taxes, which are required from all employers in order to cover federal programs like Social Security and unemployment insurance. Both employers and employees are required to pay their portion of these taxes.