What Do You Need to Know about Deductions?

As an employer, you are responsible for calculating and deducting the correct amounts from your employees' paychecks. Doing your homework in this area is a necessary evil that will pay off in terms

Payroll deductions cover a wide range of items such as federal, state and local income taxes. Rules vary from time to time and state to state, so it is important to keep abreast of new IRS and state government mandates. Who pays the deductions also varies — some deductions are paid by the employer, some by the employee and some by both.

Both the employee and the employer contribute to Medicare and Social Security. Make sure your business adheres to the correct payment schedule (quarterly, monthly or semiweekly), which varies according to how much your business collects in employment taxes.

Employers pay for federal unemployment insurance, which funds the federal unemployment program.