Question regarding withholdings on an S Corporation Good Morning Everyone,
As a newly formed S-Corporation (FL), after being a Sole Proprietor for a few years and deciding it was time to incorporate, I just have a quick question in regards to the Employee/Employer Withholdings. I am also partnered up with a Payroll company to handle all payroll and state/fed taxes and necessary withholdings. I am both 100% owner, and the only employee.
As an employee, I just processed my first payroll of $1800.00.
On that payroll, I had the following employee withholdings:
- Social Security ($111.60)
- Medicare ($26.10)
- Fed Income Tax ($202.40)
Total: $340.10
On the Employer side, I had the following liabilities:
- Social Security ($111.60)
- Medicare ($26.10)
- Fed Unemployment ($10.80)
- FL Unemployment ($48.60)
Total: $197.10
I understand all these withholdings and state/fed requirements, what I don't understand is at first, it appears that the company will only be liable for the $197.10, however, after speaking with my payroll company when I realized the business was being deducted a total of $537.20, they informed me the company is not just for the $197.10, but AS WELL for the $340.10 on the employee withholdings.
They explained it to me two times, but I am still not 100% clear on why if the $340.10 employee holdings are coming out of my payroll (gross pay) why are they as well being deducted from the company?
Thank you in advance for any/all responses in assisting me to better understand this process. I am simply new to this process and want to ensure I understand every aspect of my business as much as possible. |