Payroll Tax Schedules - Different types of taxes
Payroll Tax includes Federal Tax, Social Security Tax, and Medicare Tax. Here are more details about the Payroll Tax schedules and all other tax heads it includes.
Federal Tax
Your employer pays a part of every employee's monthly income to the
government, which is called Federal Tax. The amount pooled through this
Federal Tax is then used by the government to fund national security
and interest initiatives and programs. Such programs that receive this
funding are Community Development, National Defense, and Law
Enforcement.
The Federal Tax amount is not a pre-determined percent of a person's income. The percent that is deducted from the monthly income is based on the person's total monthly income. You can determine the amount of Federal Tax that will be deducted from your income on online sites that feature online calculators. You should always know how much money is supposed to be deducted for Federal Tax to ensure the correct amount is being deducted. This will ensure your taxes are correct at year's end and prevent you from having more deducted than is correct.
The payroll taxation department of the government employs the W-4 Form along with the Employees Withholding Certificate that is a mandate for all employees to fill out. This decides the percent of deduction from each employee's check. There is no risk for an employee when federal tax is deducted and not paid back to the government. You should always keep a copy of all your check stubs as evidence in case your employer gives you a W-2 Form that is incorrect. The statement employers give to their employees each year that details the employee's total yearly earned income along with the income that has been taken as federal tax and other tax is called the W-2 Form.
Social Security Tax
Government benefits from Social Security Tax are provided to disabled
people, their dependents, and to the country's pensioners, and is
deducted from the recipient's monthly income. Social Security Tax is
different from Federal Tax because it is a standard amount that is
taken from an employee's yearly earnings. The amount of Social Security
Tax taken from each employee's income caps off at 6.2%, and another
added cap is set for the maximum amount of Social Security Tax that is
allowed deductible from a person's income.
Medicare Tax
A standard 1.45 deduction from people that provides medical benefit
funds to senior citizens over the age of 65 is called Medicare Tax.
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