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Your Responsibilities as an Employer

For Payroll Tax Withholding, Reporting, and Payment

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Your Responsibilities for Payroll Taxes

As a business with employees, you have certain important responsibilities relating to payroll taxes. Having an understanding of these responsibilities will help you in making certain that you comply with the law. All employers must:

  • Withhold (take out) appropriate taxes from employees. These taxes include the federal, state, and local income taxes the employees must pay, and the employee's portion of Social Security and Medicare taxes (called FICA taxes. You withhold the income taxes as the employee has designated; FICA taxes are deducted as a percentage of gross pay.

  • Set aside funds for these payroll taxes, including both employer and employee portions of Social Security/Medicare, and employer liabilities for unemployment compensation and worker's compensation.

  • Remit(pay) both the employee taxes and employer taxes to appropriate agencies. For example, you will pay both the federal income tax withholding and Social Security/Medicare amounts to the IRS.

  • Report tax liabilities to appropriate agencies and to employees, as specified by law.

  • Provide other reports to federal, state, and local agencies as required. For example, you must report the employment status of all new employees.

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