What Are Employment Taxes?

Small business owners often have great responsibilities while operating and managing a business. Before you become an employer and hire employees, you need a Federal Employer Identification Number (EIN

If you have employees, you are responsible for several federal, state, and local taxes. As an employer, you must withhold certain taxes from your employees pay checks. Employment taxes include the following:

Federal income tax withholding;

Social Security and Medicare taxes;

Federal unemployment tax act (FUTA).

Federal Income Taxes/Social Security and Medicare Taxes
Businesses must generally withhold federal income tax from employees’ wages. To figure how much to withhold from each wage payment, use the employee's IRS Form W-4 (PDF) and the methods described in IRS Publication 15 (PDF), Employer's Tax Guide, and Publication 15-A, Employer's Suppplemental Tax Guide.