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What Are Payroll Taxes? A Guide to Virtual Payroll Services

With the pandemic causing major financial upheaval, it’s harder than ever for businesses to figure out how to calculate payroll taxes. Our clients have had many questions about these changes - but luckily, IAS Bookkeeping is here to help.

Do you lie awake at night worrying about money? Do you wonder if your business will stay afloat? Do you want to know the answers to financial questions, but don’t ask because you are afraid or embarrassed?


As the leading experts in our industry, IAS Bookkeeping is here to provide answers because every business needs bookkeeping. Payroll services are go hand-in-hand with bookkeeping and are key for small businesses across the United States. When you hire IAS Bookkeeping to calculate your payroll taxes, you'll reap the following benefits:


  • Peace of mind knowing that your books are in order and taxation season won't be a scramble

  • Audit-proof company with detailed documentation

  • More time to focus on your business

  • An understanding of the seasonal stream of your business

  • Knowing the essential metrics in your company: earnings, costs, profitability, etc..


A good bookkeeper and virtual payroll professional is essential to business owners who want to spend more time growing their business rather than maintaining it. For a small business owner, your tax season doesn’t end in April, and now more than ever, there has been confusion and questions around payroll taxes than previous years.


When are payroll taxes due?


Always refer to the official IRS channels for up-to-date information to make sure you comply with federal law, but of course, we can assist in those areas too.


Tax filing preparedness is key for small business owners. Here’s an overview for the most important payroll tax deadlines in 2021:


  • February 1: Quarterly filings for Q4, plus all year-end filings

  • April 30 : Quarterly filings for Q1

  • August 2 : Quarterly filings for Q2

  • November 1: Quarterly filings for Q3

  • The 15th of each month (or the first Monday following) : Payroll tax payments for the previous month

How much are payroll taxes?


Keep in mind that payroll taxes are comprised of both federal and state withholding, so you will need to keep track of both the federal laws and your state requirements. Payroll tax law states that employers are responsible for withholding income tax on behalf of employees.


From there, you would need to remit the taxes quarterly to federal, local, and state tax authorities. You will need to have a copy of your employee's W-4 and their gross pay in order to calculate the amount of federal income tax you should withhold.


Next, you need to decide which method you will use to calculate your withholding. There are two methods employers can choose from: the percentage or the wage bracket method. Although it is not easy, the wage bracket method makes it easier to calculate payroll taxes.


These calculations can be difficult to compute accurately on your own, so it’s worth considering a virtual bookkeeper and payroll professional to not only lighten your load but to also make sure you comply with both federal and state payroll tax laws.

What payroll taxes do employers pay?


The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, making it 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total.


Combined, the FICA tax rate is 15.3% of the employees' wages.


Struggling with how to figure payroll taxes?


IAS Bookkeeping’s virtual payroll services can keep you on track and compliant with federal and state payroll taxes. Click here to get in touch with our team.

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