Intro – Payroll Tax #
Payroll Taxes are calculated on the money employees earn, including wages, salaries, bonuses, and tips. In many cases, both the employer and the employee contribute a portion of the payroll taxes. The employer withholds the employee’s share from their paycheck and remits it along with the employer’s share to the appropriate government agencies.
- The system automates the preparation of essential payroll taxes, like federal income tax, Social Security, and Medicare.
Create a New Payroll Tax #
- Go to Payroll on the left sidebar, and select Payroll Tax
- Click Add New button.
- On the Add New benefit page, fill in the following fields
- Tax Name: Enter a unique tax name.
- Tax Agency: Select tax agency responsible for this tax.
- Frequency: Select tax deposit frequency.
- Wage base: Enter the maximum wages subject to this tax.
- Employee Contribution:
- Employee Rate %: Enter the percentage of an employee’s gross pay that the employer withholds from their paycheck each pay period.
- Annual Maximum: Enter the annual limit for employee contributions if any.
- Employer Contribution:
- Employer Rate %: Enter the percentage of an employee’s gross pay used to calculate the employer’s contribution.
- Annual Maximum: Enter the annual limit for employer contributions if any.
- Employee Withholding Account: Tracks the amount the company withholds from employee paychecks.
- Liability Account: Tracks the amount the company owe to a tax agency.
- Expense Account: Track employer’s contribution as payroll expenses.
- Click Save
