{"id":392,"date":"2020-09-25T14:39:20","date_gmt":"2020-09-25T21:39:20","guid":{"rendered":"https:\/\/payroll.dentist\/?p=392"},"modified":"2020-09-25T14:39:20","modified_gmt":"2020-09-25T21:39:20","slug":"who-pays-payroll-taxes","status":"publish","type":"post","link":"https:\/\/payroll.green\/?p=392","title":{"rendered":"Who Pays Payroll Taxes In The US?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"392\" class=\"elementor elementor-392\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-e760a1d elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"e760a1d\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5e2b053\" data-id=\"5e2b053\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-24ec013 elementor-widget elementor-widget-text-editor\" data-id=\"24ec013\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>A payroll tax is paid by both employers and employees. A percentage is withheld by employers from each employee\u2019s paycheck, and <a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/understanding-employment-taxes\" target=\"_blank\" rel=\"noopener\">paid to the government<\/a>. Independent, freelance and self-employed Individuals pay similar self-employment taxes to the government.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-30cc2a3 elementor-widget elementor-widget-image\" data-id=\"30cc2a3\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/payroll.dentist\/wp-content\/uploads\/2020\/09\/employees-work-masks.jpg\" title=\"\" alt=\"\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5a63812 elementor-widget elementor-widget-text-editor\" data-id=\"5a63812\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The Federal Government imposes 12.4% <strong>Social Security Tax<\/strong>. This is split equally between the employer and employee who contribute 6.2% each. The Social Security wage base for 2020 is capped at $137,700. This means individuals who earn over $137,700 in 2020 need not pay Social Security Tax.<\/p><p>Both employers and employees contribute 1.45% each towards a <strong>Medicare tax<\/strong>. Individuals earning over $200,000 (or $250,000 if married filing jointly) are liable to pay an <a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/questions-and-answers-for-the-additional-medicare-tax\" target=\"_blank\" rel=\"noopener\">additional Medicare tax<\/a> of 0.9% from their paycheck. There is no wage base limit for Medicare tax.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-5e533c0b elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"5e533c0b\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3086b609\" data-id=\"3086b609\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-73016d1e elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"73016d1e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-b0422ba elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"b0422ba\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b417f1c\" data-id=\"b417f1c\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-0818113 elementor-widget elementor-widget-heading\" data-id=\"0818113\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Who Benefits From A Payroll Tax Cut?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d53e1df elementor-widget elementor-widget-text-editor\" data-id=\"d53e1df\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>President Donald Trump issued an <a href=\"https:\/\/www.whitehouse.gov\/presidential-actions\/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster\/\" target=\"_blank\" rel=\"noopener\">Executive Order<\/a> on August 8, 2020, on a Payroll Tax Cut from Sept. 1, through Dec. 31, 2020.\u00a0Employees, who make less than $4,000 bi-weekly, or $104,000 an year, are eligible for the Payroll tax holiday.<\/p><h3>Is Payroll Tax Deferral Optional?<\/h3><p>According to an IRS representative, <a href=\"https:\/\/news.bloombergtax.com\/payroll\/irs-confirms-employee-social-security-tax-deferral-is-optional\" target=\"_blank\" rel=\"noopener\">deferring the employee portion<\/a> of Social Security tax is optional.<\/p><h3>Will We Have To Pay Back Payroll Taxes?<\/h3><p>According to the President\u2019s Executive Order, Payroll taxes will be deferred, not forgiven. This means, if no further permanent cut is enacted, the <strong>deferred taxes will have to be repaid in 2021<\/strong>.<\/p><h3>Does Payroll Tax Include Federal Income Tax?<\/h3><p>Yes. Part of the Federal Income Tax is included in the employee\u2019s Payroll Tax withholding.<br \/>Although the employer will withhold and pay the employees payroll taxes, the employee is responsible for paying the tax shortfall from other sources of income that are not withheld.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-bca9207 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"bca9207\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b944e9c\" data-id=\"b944e9c\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-d981918 elementor-widget elementor-widget-blockquote\" data-id=\"d981918\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t \t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-529eb60 elementor-widget elementor-widget-text-editor\" data-id=\"529eb60\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3>What Is The Difference Between Income And Payroll Taxes?<\/h3><p><strong>Income Tax<\/strong> is calculated on how much money an individual makes from<strong><em> all sources of income<\/em><\/strong>. Income tax is calculated on wages as an employee, any independent work done as a contractor, self-employment earnings, and income from other sources like commissions, bank interest, stock dividends, and gains from sale of assets like property and stock. Income Tax is complex and consists of federal, state, and local income taxes. Income Tax also takes into consideration other factors such as an individual\u2019s income tax bracket, marital status, dependents and mortgage payments apart from employment income.<\/p><p><strong>Payroll Taxes<\/strong> are simple \u201cflat rate\u201d taxes calculated and deducted from an employee\u2019s wages. Payroll Taxes include both Social Security and Medicare taxes. These are known as Federal Insurance Contributions Act (FICA) tax. Employers withhold the employee\u2019s FICA contribution and pay the government Payroll Taxes direct.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-ab1cc26 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"ab1cc26\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-c0e6aa0\" data-id=\"c0e6aa0\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2dc6ca8 elementor-widget elementor-widget-image\" data-id=\"2dc6ca8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/payroll.dentist\/wp-content\/uploads\/2020\/09\/business-taxes.jpg\" title=\"\" alt=\"\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-143d620 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"143d620\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1aec6bc\" data-id=\"1aec6bc\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-fdfe67e elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"fdfe67e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-d261967 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"d261967\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-0ed683e\" data-id=\"0ed683e\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-c5daba3 elementor-widget elementor-widget-heading\" data-id=\"c5daba3\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What Is Funded By Payroll Taxes?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-374bb3f elementor-widget elementor-widget-text-editor\" data-id=\"374bb3f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The Federal Government funds Social Security, Medicare, and other social insurance programs from revenue generated by payroll and self-employment taxes.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-59f60b5 elementor-widget elementor-widget-text-editor\" data-id=\"59f60b5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3>Does Payroll Tax Pay For Social Security?<\/h3><p>Yes. Social Security is paid for through Payroll taxes and self-employment taxes under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA).<br \/>Taxes are allocated to<a href=\"https:\/\/www.ssa.gov\/policy\/docs\/statcomps\/supplement\/2013\/oasdi.html\" target=\"_blank\" rel=\"noopener\"> three trust funds<\/a>: the Old-Age (retirement) and Survivors Insurance (OASI), the Disability Insurance (DI), and the Medicare Hospital Insurance (HI) Trust Funds.<\/p><h3>Does Payroll Tax Affect Social Security?<\/h3><p>Yes. Payroll Taxes affect Social Security on the long run.<\/p><p>In 2019, almost 90% of total Old-Age and Survivors Insurance and Disability Insurance income was <a href=\"https:\/\/www.ssa.gov\/news\/press\/factsheets\/HowAreSocialSecurity.htm\" target=\"_blank\" rel=\"noopener\">financed through payroll taxes<\/a>.<\/p><p>The massive rise in unemployment numbers due to COVID-19, along with the Payroll tax cuts will have a substantial impact on Social Security income. This will result in draining Social Security\u2019s coffers quicker than projected. Researchers at the Penn Wharton Budget Model now project that Social Security reserves might be <a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/issues\/2020\/5\/28\/social-security-finances-coronavirus\" target=\"_blank\" rel=\"noopener\">depleted 4 years earlier<\/a> than anticipated \u2013 in 2032 (from the previous 2036) <\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-0c95844 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"0c95844\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b3875c1\" data-id=\"b3875c1\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-fd4ce08 elementor-widget elementor-widget-image\" data-id=\"fd4ce08\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/payroll.dentist\/wp-content\/uploads\/2020\/09\/senior-couple-beach.jpg\" title=\"\" alt=\"\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2297c018 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2297c018\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6578ee5b\" data-id=\"6578ee5b\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2d48d46d elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"2d48d46d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-c95220a elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"c95220a\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-e06cd09\" data-id=\"e06cd09\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-d54433f elementor-widget elementor-widget-heading\" data-id=\"d54433f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Which Is An Example Of A Payroll Tax?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5766b2c elementor-widget elementor-widget-text-editor\" data-id=\"5766b2c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>As an employer, you\u2019ll have to manage two types of taxes. Taxes that comes out of your (business) pocket, and taxes that you collect from your employee and pay the government.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-9a70843 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"9a70843\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-17eed9b\" data-id=\"17eed9b\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-b7651e7 elementor-widget elementor-widget-text-editor\" data-id=\"b7651e7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3>Federal Taxes That You Must Pay Out Of Pocket<\/h3><ul><li><strong>Federal Insurance Contributions Act (FICA):<\/strong> Social Security and Medicare Tax: Social Security Tax is 12.4% (employer and employee share the cost equally \u2013employer pays 6.2% and employee pays 6.2%). Medicare is 2.9% (employer and employee share the cost equally \u2013employer pays 1.45% and employee pays 1.45%)<\/li><li><strong>Federal Unemployment Tax Act (FUTA):<\/strong> The Tax rate is 6% on the first $7,000 earned by an employee. Earnings over $7,000 are not taxed. That said, most states provide a 5.4% credit, which means employers pay only 0.6% for each employee. Employees do not pay FUTA. The <a href=\"https:\/\/www.edd.ca.gov\/pdf_pub_ctr\/de202.pdf\" target=\"_blank\" rel=\"noopener\">FUTA rate for California<\/a> in 2020 is 0.6%.<\/li><\/ul><h3>California State Taxes That You Must Pay Out Of Pocket<\/h3><ul><li><strong>Unemployment Insurance (UI<\/strong>): The <a href=\"https:\/\/edd.ca.gov\/pdf_pub_ctr\/de44.pdf\" target=\"_blank\" rel=\"noopener\">UI program<\/a> provides temporary payments to individuals who are unemployed through no fault of their own. Apart from FUTA tax, you also are liable to pay California UI Tax on behalf of your employees. New employers pay 3.4% per employee for up to three years on the first $7,000 earned by an employee..<\/li><li><strong>Employment Training Tax (ETT<\/strong>): ETT provides funds to train employees in targeted industries to improve the competitiveness of California businesses. Employers are liable to pay 0.1% on the first $7,000 in wages paid to each employee in a calendar year. The maximum tax is $7 per employee per year ($7,000 x .001).<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-aeec4f5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"aeec4f5\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-43bc577\" data-id=\"43bc577\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5a602b7 elementor-widget elementor-widget-heading\" data-id=\"5a602b7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">2020 Federal and State Payroll Taxes<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-558aba2 elementor-widget elementor-widget-heading\" data-id=\"558aba2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Federal Taxes<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-709a15b elementor-widget elementor-widget-shortcode\" data-id=\"709a15b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\">[wptb id=424]<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7ed19e8 elementor-widget elementor-widget-heading\" data-id=\"7ed19e8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">California State Taxes<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-059ced9 elementor-widget elementor-widget-shortcode\" data-id=\"059ced9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\">[wptb id=428]<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4d698ed elementor-widget elementor-widget-text-editor\" data-id=\"4d698ed\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong>Source:<\/strong> The <a href=\"https:\/\/www.edd.ca.gov\/pdf_pub_ctr\/de202.pdf\" target=\"_blank\" rel=\"noopener\">Employment Development Department<\/a> (EDD), State of California<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-b644fac elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"b644fac\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2652d4b\" data-id=\"2652d4b\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-25a8476 elementor-widget elementor-widget-heading\" data-id=\"25a8476\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Outsource Your Payroll Tax<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0676820 elementor-widget elementor-widget-text-editor\" data-id=\"0676820\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Payroll Taxes can be confusing and complicated. Payments are due quarterly. Miss a tax deadline, and you could face a penalty between 2% and 15%. Save the hassle of doing it yourself. Save money by outsourcing your Payroll. It\u2019s cheaper than hiring a fulltime employee.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1979c98c elementor-section-full_width elementor-section-height-default elementor-section-height-default\" data-id=\"1979c98c\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-70bdb8bc\" data-id=\"70bdb8bc\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-746a583c elementor-widget elementor-widget-heading\" data-id=\"746a583c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Join Over 3,000 Businesses and <br>\nGet Started for FREE<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-17f4ff6b elementor-widget elementor-widget-text-editor\" data-id=\"17f4ff6b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Easy Setup. No Upfront payment. Cancel Anytime<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-231bf5ea elementor-align-center elementor-widget elementor-widget-button\" data-id=\"231bf5ea\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/payroll.dentist\/contact\/\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Start Now<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-249e5d27 elementor-widget elementor-widget-text-editor\" data-id=\"249e5d27\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Base price a low $19.99 upto 5 employees, $1 per additional employee<\/span><\/p><p><b>Try FREE for 30 Days. No Obligation.<\/b><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>A payroll tax is paid by both employers and employees. A percentage is withheld by employers from each employee\u2019s paycheck, and paid to the government. Independent, freelance and self-employed Individuals pay similar self-employment taxes to the government. The Federal Government imposes 12.4% Social Security Tax. This is split equally between the employer and employee who [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":434,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-392","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxes"],"aioseo_notices":[],"aioseo_head":"\n\t\t<!-- All in One SEO 5.0.1.1 - aioseo.com -->\n\t<meta name=\"description\" content=\"A payroll tax is paid by both employers and employees. A percentage is withheld by employers from each employee\u2019s paycheck, and paid to the government. Independent, freelance and self-employed Individuals pay similar self-employment taxes to the government. The Federal Government imposes 12.4% Social Security Tax. 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A percentage is withheld by employers from each employee\u2019s paycheck, and paid to the government. Independent, freelance and self-employed Individuals pay similar self-employment taxes to the government. The Federal Government imposes 12.4% Social Security Tax. This is split equally between the employer and employee who","og:url":"https:\/\/payroll.green\/?p=392","article:published_time":"2020-09-25T21:39:20+00:00","article:modified_time":"2020-09-25T21:39:20+00:00","twitter:card":"summary_large_image","twitter:title":"Who Pays Payroll Taxes In The US? - Payroll.Green","twitter:description":"A payroll tax is paid by both employers and employees. A percentage is withheld by employers from each employee\u2019s paycheck, and paid to the government. Independent, freelance and self-employed Individuals pay similar self-employment taxes to the government. The Federal Government imposes 12.4% Social Security Tax. This is split equally between the employer and employee who"},"aioseo_meta_data":{"post_id":"392","title":null,"description":null,"keywords":null,"keyphrases":null,"primary_term":null,"canonical_url":null,"og_title":null,"og_description":null,"og_object_type":"default","og_image_type":"default","og_image_url":null,"og_image_width":null,"og_image_height":null,"og_image_custom_url":null,"og_image_custom_fields":null,"og_video":null,"og_custom_url":null,"og_article_section":null,"og_article_tags":null,"twitter_use_og":false,"twitter_card":"default","twitter_image_type":"default","twitter_image_url":null,"twitter_image_custom_url":null,"twitter_image_custom_fields":null,"twitter_title":null,"twitter_description":null,"schema":{"blockGraphs":[],"customGraphs":[],"default":{"data":{"Article":[],"Course":[],"Dataset":[],"FAQPage":[],"Movie":[],"Person":[],"Product":[],"ProductReview":[],"Car":[],"Recipe":[],"Service":[],"SoftwareApplication":[],"WebPage":[]},"graphName":"","isEnabled":true},"graphs":[],"defaultGraph":"","defaultPostTypeGraph":""},"schema_type":"default","schema_type_options":null,"pillar_content":false,"robots_default":true,"robots_noindex":false,"robots_noarchive":false,"robots_nosnippet":false,"robots_nofollow":false,"robots_noimageindex":false,"robots_noodp":false,"robots_notranslate":false,"robots_max_snippet":null,"robots_max_videopreview":null,"robots_max_imagepreview":"large","priority":null,"frequency":null,"local_seo":null,"breadcrumb_settings":null,"limit_modified_date":false,"ai":null,"created":"2022-08-25 21:31:11","updated":"2025-06-04 05:46:56","seo_analyzer_scan_date":null,"focus_keyword":null,"additional_keywords":null,"truseo_locale":null},"aioseo_breadcrumb":"<div class=\"aioseo-breadcrumbs\"><span class=\"aioseo-breadcrumb\">\n\t\t\t<a href=\"https:\/\/payroll.green\" title=\"Home\">Home<\/a>\n\t\t<\/span><span class=\"aioseo-breadcrumb-separator\">&raquo;<\/span><span class=\"aioseo-breadcrumb\">\n\t\t\t<a href=\"https:\/\/payroll.green\/?cat=6\" title=\"Taxes\">Taxes<\/a>\n\t\t<\/span><span class=\"aioseo-breadcrumb-separator\">&raquo;<\/span><span class=\"aioseo-breadcrumb\">\n\t\t\tWho Pays Payroll Taxes In The US?\n\t\t<\/span><\/div>","aioseo_breadcrumb_json":[{"label":"Home","link":"https:\/\/payroll.green"},{"label":"Taxes","link":"https:\/\/payroll.green\/?cat=6"},{"label":"Who Pays Payroll Taxes In The US?","link":"https:\/\/payroll.green\/?p=392"}],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/payroll.green\/index.php?rest_route=\/wp\/v2\/posts\/392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/payroll.green\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/payroll.green\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/payroll.green\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/payroll.green\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=392"}],"version-history":[{"count":0,"href":"https:\/\/payroll.green\/index.php?rest_route=\/wp\/v2\/posts\/392\/revisions"}],"wp:attachment":[{"href":"https:\/\/payroll.green\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/payroll.green\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/payroll.green\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}