What Payroll Taxes Do Employers Pay? A Quick and Simple Guide


You open up your first pay stub and notice a lot of deductions. The amount you’re taking home every two weeks is a lot less than you expected and you’re beginning to wonder what all these deductions mean.

Or perhaps you’ve started a business and are trying to figure out what payroll taxes do employers pay.

If you’re scratching your head to either of these situations, then you’ve come to the right place. Keep reading to find out more about payroll taxes.

What Payroll Taxes Do Employers Pay?

Employers have to pay specific taxes on the total of their payroll run as well as per each individual employee. When it comes to tax payments it’s usually easier to solicit payroll services to calculate them properly on your behalf.

The worst thing to do would be to miscalculate and have to claw back from your employees or have them be overly taxed. You can check out payroll services options at for more information.

Below you’ll find out what payroll taxes employers pay.

Federal Unemployment Tax

This tax gets paid fully by the employee without wage withholding. These are linked to your federal EIN registered number where the state your business resides is and you as an employer as responsible for paying the obligated tax percentage which is between 0.6-6%.

State Specific Unemployment Tax

Each state will have its own specific unemployment tax to be paid by the employer. The percentage varies per state and in Pennsylvania, New Jersey, and Alaska the tax is shared between the employee and employer.

Social Security & Medicare Tax

Both social security and medicare tax are shared payments between the employer and employee. The percentage of social security is a flat rate of 6.2% for both the employer and employees. Whereas the medicare tax flat rate is 1.45% for both.

What Payroll Taxes Do Employer Withhold?

In some instances, your pay stub and payroll will include tax withholding on behalf of the employee to the government. There are two such tax withholdings that will be summed on the W-4’s at the end of the year.

Federal Income Tax

This is the portion of an employee’s salaries that’s cut back and paid to the government as their federal income tax rate. Paying it now will be easier for tax filings for employees during tax time.

State Specific Income Tax

Each state has its own specific tax rate that deducted from employees’ income. As an employer, it’s expected that you claw back the correct percentage from employee’s wages and pay the state government on their behalf.

Knowing What Payroll Taxes Do Employers Pay

Knowing what payroll taxes do employers pay is half the battle when it comes to calculating payroll. It’s important that you understand the percentages and requirements to produce the right payment amount for your employees.

As an employee, it’s also important to understand your deductions so that you are aware of what goes on your pay stub double-checking that it’s correct.

Check out the rest of our site for more content to help answer your business questions!

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