How to Calculate Payroll Tax

The IRS is very strict on payroll tax and the deductionstax is $76,000 dollars a year, beyond that, taxes need
associated with it. Even a small miscalculation can landnot be deducted from the employee. The same
an organization in serious trouble with this regulatoryprocedure is followed for Medicare taxes, calculated
authority. So, it is important to maintain careful recordsat 1.45% of the employees' salary. There is no wage
of payroll accounts in an organization.The first step tobase for Medicare taxes, and the employee and the
calculating payroll tax is getting each and employee toemployer goes on paying the tax independent of the
fill up the W-4 form from the Internal Revenue Service.salary of the employee. The Federal Unemployment
This form aims to calculate the payroll tax dependingTaxes (FUTA) is also calculated at 6.2%, but an
on the marital status of an employee and the numberemployer can take credit up to 5.4%. The FUTA wage
of dependants. Since most states have payrollbase is $7,000 dollars; an employee whose wages
structures that are based on the federal systemexceed this amount in a year, stops paying FUTA
formulated by the IRS, this form helps organizationstaxes that year. The same rules are applicable to
calculate the payroll tax withholding for both federalState Unemployment Taxes (SUTA) also.These
and state governments.Currently, the social securitycalculations and deductions have to be done
tax withheld from an employee's wages is calculatedaccurately to avoid any confusion. Each company
as 6.2% of total salary. This same amount has to bemust have a payroll account to that these deductions
contributed by the employer, and added to the payrollare transferred to and paid to the state and central
account of the organization. The wage base for thisgovernments at the end of the year.