When you hear someone speak of payroll tax, they could be referring to any number of employment taxes that businesses are required to pay or withhold from employee paychecks. Unless an employee claims on his or her W-4 to be exempt from withholding, employers are required to withhold both federal and state income taxes from each paycheck. These are remitted periodically, the frequency of which depends on the size of your payroll. In addition, employers withhold the employee portion of Social Security and Medicare taxes, which they match with an equal amount from their own funds when they remit these to the government. Federal unemployment tax is paid annually out of the employer's own funds.
Most employers use the Electronic Federal Tax Payment System (EFTPS) to deposit their payroll taxes. You have the option of using the online or telephone system for making deposits. Reporting of employment taxes is done quarterly on form 941, Employer's Quarterly Fedecontinue reading →