Withholding and paying taxes: Payroll compliance

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in Office Management,Payroll Management

Employees' pay and taxable fringe benefits are subject to federal income tax withholding, FICA withholding, and state income tax withholding. Employers pay a matching share of FICA taxes; only employers pay federal unemployment taxes, or FUTA.

States collect unemployment contributions, or SUTA, from employers. FUTA and SUTA taxes are paid quarterly.  Some states collect unemployment taxes from employees, and still others collect disability taxes from employees. 

Employers must withhold taxes when employees are actually or constructively paid.  Employees are constructively paid when their wages are credited to the account of, or set apart for, employees so they can draw on them at any time.  Withholding is based on pay periods.  Employers choose their pay periods, which must comport with state wage payment laws.  There are weekly, biweekly, semimonthly, monthly, quarterly, semiannual, annual and daily/miscellaneou...(register to read more)

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