How Payroll in the USA works?
Payroll in the USA
If your business needs or requires employees, it is important to understand all your obligations, as the business owner, that payroll demands. Below we will discuss the main items to consider. When you hire our firm, we will manage all of your payroll needs using our LeafPay Payroll Software. But first, let’s talk about what requirements payroll will bring:
Monthly Federal Payroll Tax - Federal Payroll is divided into Social Security and Medicare. Social Security is 6.2% of the gross wages of your employee, while Medicare is 1.45% of the gross wages of your employee. Together this is known as FICA and adds up to 7.65%. This amount is withheld from the employee and sent to the IRS. The employer must also contribute the same 7.65% and send both portions to the IRS each month. Therefore, the total Payroll Tax an employee submits to the IRS is 15.3%..
Quarterly Federal Payroll Reports - After paying the federal payroll tax each month, we will submit a Quarterly 941 Payroll Report to the IRS which gives them a detailed report on all your employees, their pay, and their deductions.
State Payroll Tax-Every quarter, the Department of Revenue (DOR) will require your business to also pay an unemployment fee based off your unemployment tax rate.
LeafPay Payroll Software-If this all seems like a lot of work, don’t worry. We will do it all with as little effort and time required. This is using our proprietary LeafPay Payroll Software. Each payroll period, you will only have to approve that periods payroll. We will do the rest. It’s that simple.
