Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 08-23-2007, 08:29 AM
Junior Member
 
Join Date: Jan 2007
Posts: 11
How much does payroll tax cost as percentage of total wages paid out?

I am in the process of hiring a new employee and wanted to know the additional cost in terms of payroll taxes that I would have to incur.

If my employee was being paid $3,000 per month what is the payroll tax liability amount that I would have to pay?

Are there any other costs that I am required to pay?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-14-2008, 12:49 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,399
Blog Entries: 3
How much does payroll tax cost as percentage of total wages paid out?

Payroll costs generally include the following cost components:

1. Employers share of Social Security Taxes.
This is currently at 6.2%. Your employee payroll does not exceed the FICA limit of $102,000 for 2008, hence all his wages are subject to this tax.
2. Employers share of Medicare Taxes.
This is currently at 1.45%. There is no income limit for this tax.
3. Federal unemployement cost of FUTA taxes.
This could be as low as 1%
4. State Unemployement taxes.
This amount varies according to each State but is also very low approx 1%.

The rough estimate could be around 10% of the total payroll in your case, $36,000 x 10% = $3,600 as employer portion of payroll taxes.

Other Non-Payroll related expenses.
1. State Workmans Compensation.
This could be as low as 4% of Annual payroll for States other than California, where that could be as high as 10%.
2. Payroll processing fee.
This is about $30 for bi-weekly payrolls for 1 employee, plus preparation of quarterly returns and year end W-2 processing another $150-200)

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning