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A payroll tax chart provides information for an employer regarding employee deductions. This includes withholding requirements for social security and worker’s compensation. The charts are maintained by the Internal Revenue Service (IRS) and are updated yearly and can be found on irs.gov.
Outsourcing Payroll
Most employers outsource their payroll to third-party processors because accounting for payroll taxes can be complicated. If the payroll processor makes a mistake, the company is liable and will be charged penalties and additional fees, levied by the IRS.
Reading a Payroll Tax Chart
Almost all employees will have at least 6.2 percent in Social Security tax and 1.45 percent in Medicare support withholdings. Matching the appropriate table to the employee status is very important.
There is software and hardware available to simplify the process and make deductions easier. However, it is recommended that you hire an outside company to handle the deductions in order to avoid costly errors.
