This section is designed to help familiarize you with the basic concepts of payroll management and introduce options to help make the process simpler.   As an employer, you have specific payroll responsibilities that are required by government agencies. These agencies can be federal, state or local. Some of these responsibilities include, but are not limited to, withholding amounts from your employees' compensation to cover income tax, social security, Medicare, and other payments. Consult with a tax professional or accountant to address all of your business' specific needs.

What is Payroll?
Payroll is the total amount of money paid by an employer to its employees over a set amount of time (i.e. weekly or biweekly).

What are Payroll Taxes?
Any tax levied by a government agency on employees' wages, tips, and other compensation. The amounts withheld by employers from employees' pay for federal income, social security, and Medicare taxes are considered as trust fund taxes. They are referred to as trust fund taxes because the money is held in a special trust fund for the U.S. government. Amounts withheld for state and local income taxes are held in trust for the state or local government.

Employer tax obligations Overview!
Payroll taxes fall into the categories listed below. Just click on topics that interest you. However, keep in mind this is a brief overview and is neither comprehensive for any specific business situations. To understand all of your payroll tax obligations, please consult with your lawyer or CPA for greater details, or call PayCare at 1-800-218-9577.
Federal Tax Liabilities
Federal tax liabilities can include some or all of these components:

• Federal Income Tax (FIT)
• Employee Social Security Tax (EE FICA)
• Employer Social Security Tax (ER FICA)
• Employee Medicare Tax (EE Med)
• Employer Medicare tax (ER Med)
• Earned Income Credit (EIC)

State Disability Insurance
Each states employment tax requirements are different.  All have state unemployment insurance and most and state income tax withholding requirements.  Plus some locals, schools and counties require withholding and/or head taxes to pay by the employer.  For state-by-state details go to www.taxadmin.org/fta/link/forms.html and select the state in question

Federal Unemployment taxes    
The Federal Unemployment Tax Act (FUTA) enacted the employer paid tax to pay for the federal unemployment insurance programs.  Each employer's liability begins January 1st of the first $7,000 of each employee.  Providing the employer employed 1 and more people for at least twenty days, or paid more than $1500.00 in wages in the year.
Every employer that has met the minimum requirements must file a Form 940 or 940-EZ annually to report taxable wages paid during the year and reconcile quarterly deposits. If you make state unemployment insurance contributions to one state, and the state is not subject to a credit reduction, you may file Form 940-EZ.

State Income Taxes
Each states employment tax requirements are different.  All have state unemployment insurance and most and state income tax withholding requirements.  Plus some locals, schools and counties require withholding and/or head taxes to pay by the employer.  For state-by-state details go to www.taxadmin.org/fta/link/forms.html and select the state in question
Local Income Tax
Each states employment tax requirements are different.  All have state unemployment insurance and most and state income tax withholding requirements.  Plus some locals, schools and counties require withholding and/or head taxes to pay by the employer.  For state-by-state details go to www.taxadmin.org/fta/link/forms.html and select the state in question