What is the Median Corporate Payroll Tax in America?

While many people have heard the term corporate payroll taxes, some may wonder exactly what these taxes are, and how much an average corporation pays in payroll taxes.

What are Corporate Payroll Taxes?

Corporations are required to pay a certain amount of tax per employee to various organizations in the federal and state government.

They come in two varieties: the first is taxes that are paid from the employer’s profits that do not decrease the amount of take home pay an employee receives. These taxes go to Social Security and Medicare.

The second type is the “withholding” amounts seen on an employee’s paycheck. These taxes include federal income tax, the Social Security tax and the Medicare tax. The employer may also have to withhold the state income tax, and sometime taxes for local government entities like cities.

Median Corporate Payroll Taxes

The average or median amount of corporate payroll taxes and individual pays is 7.65% of a person’s salary for items other than income tax. This includes 6.2 percent to Social Security and 1.45 to Medicare.

The employer must double this amount, paying an additional 6.2 percent to Social Security and 1.45 percent to Medicare on the behalf of the employee, plus an additional .8 in unemployment tax.