What are the different wage tax rates?

rates on the payout sheets determine the amount of money that is either deducted from the employee's wage or paid by the employer based on the amount of wages. The money is then handed over to the IRS, the state tax office or the local tax authority as tax payments. These are covered by three main types of taxes: income tax, social security and Medicare tax and unemployment tax. Precise wage tax rates differ depending on the employee's reception and location. This is done by consulting a detailed rate table. The actual amount paid includes the application of this rate to the amount of salaries, which first deducted the tax withdrawal. The amount of this collision is designed to reflect the permissible deductions that create data on taxable income. A similar process is used for wage taxes for the state and in some cases local taxes.

The general principle of the process is to take over the overall annual calculation of the Tax Act and divide it into pieces corresponding to the salary period. The goal is therefore that at the end of the year will goPrice correct tax amount. In practice, this is often not true and the employee must pay another amount or be returned to them. For this reason, the money deducted from wages as wage tax is not technically classified as an employee who pays and settles his income tax, but rather as a payment for the final annual law on the basis of his tax return at the end of the year.

The second case where wage tax rates are paid are payments to finance general social security and Medicare programs. After the Federal Insurance Contribution Act, Fica taxes, legislation that has set taxes are commonly called. Since 2011, the Fico tax rate was paid 4.2% of the first $ 106,000, plus 1.45% of the entire income; These two components are aimed at social security and medicare. Historically, the employer would pay the same amount for Fico employee payments. However, the employer pays for 6.2% of the first $ 106,000 per Social Security SP for the Tax Yearthan 4.2% paid by the employee.

The final category of wage tax is unemployment insurance. Unlike income taxes and Fica, this will not be registered from the employee's wages and instead the employer is paid. It is classified as wage tax because the tax amount is based on money paid by employees. The employer pays 6.2% of the first $ 7,000 annual employee's wage for the 2011 Tax Year. Early payment can reduce this rate to just 0.8%.