Technically, the employer takes nothing for taxes from an employee’s salary. The business owner withholds money and remits it to the government. In addition, the employer pays taxes based on how much the employer pays the employee. These are also remitted to the government.
Current Federal Tax Rates
Following is a chart that contains the taxable wage basis and tax rates for employers and employees. The 2019 maximum contributions and limits are given per employee.
FICA
On wages of $132,900 (2019): Employee Rate 6.20%.
On wages of $132.900 (2019): Employer Rate 6.20%.
Medicare
On ALL wages: Employee Rate 1.45%.
On ALL wages: Employer Rate 1.45%.
Above wages of $200,000.00.00 for an individual or $250,000.00.00 for joint filers there is an additional surcharge of 3.8% on the employee only.
Learn more about OASDI and SSI Program Rates & Limits, 2019 at SSA.gov.
Federal Unemployment
Employer Rate 0.6%.
After credit for paid SUI (state unemployment insurance).
On wages up to $7,000.00.00.
State and Local Tax Rates
These vary depending on where you live and where you work.
Forty-three states have withholding for State Income Taxes.
All States charge the employer for unemployment taxes which pay for unemployment compensation.
Some Local taxing agencies withhold taxes and charge additional taxes to the employer.
There are also in some states taxes withheld for paying for Paid Family Leave. This is a growing trend and will probably continue to expand.
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Charles Read, CPA, USTCP, IRSAC
President/CEO GetPayroll
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