If you’re a small business owner in the United States, you’ll need to understand payroll taxes from the moment you hire your first employee. Dating back to Franklin D. Roosevelt’s New Deal, payroll taxes are the taxes withheld from an employee’s earnings (including any wages, salaries, bonuses, or cash gifts from the employer) to fund federal programs like Medicare and Social Security.
Instead of directly taxing employees, who may or may not pay their taxes on time, the government requires employers to withhold a percentage of employee paychecks. As a result, it’s up to small business owners to understand the ins and outs of taxes. Employers can handle this process on their own, enlist the help of a tax professional, or employ a payroll service to handle all of their payroll and payroll tax responsibilities.
Dispatches From The Front 