Discover how to figure payroll deductions accurately with resources to forms.
: A payroll system is the software through which a company manages payment of its employees. As a general rule of thumb, large companies rely on a dedicated human resources and accounting staff to take care of payroll functions while smaller businesses tend to rely on the services of a part-time bookkeeper or third-party payroll service.
Explore the history of FICA and the controversial road blocks experienced along the way
How Does Salary Work? Discover how fixed salary works versus hourly wage salary.
Base salary is BEFORE taxes. Fixed salary being referred to as the base to go along with other compensation such as sales commissions, stock options and performance bonuses.
Who is subject to backup withholding? People who are subject to backup withholding have failed to do one of the following.
What is backup withholding? The simplest way to think of backup withholding is to see it as a safety net used by the federal government when dealing with certain recipients of income that is not a wage, salary or tips.
Who is exempt from backup withholding? Anyone whose annual taxable U.S. income is tabulated exclusively from W-2 forms is automatically exempt from the concept of backup withholding.
FICA is NOT the same as social security. Rather, they are, respectively, a piece of legislation signed into law in 1935 and a means of personal income taxation by which the benefits of that law are financed.
What does FICA stand for? FICA is an acronym for Federal Insurance Contribution Act and is a form of social security insurance tax collected via payroll taxes, administered by the Internal Revenue Service.
FICA is calculated based on a percentage of gross earnings. FICA taxes total approximately 7.65% of gross earnings per year. Gross earnings are funds earned prior to any deductions. FICA funds distribution is two-fold:
The advantages of outsourcing payroll are many especially for small to medium-sized businesses. The decision to outsource could have extensive and long-lasting effects and should never be made lightly.
A 1099 is required under many different business circumstances. Find out the terms and conditions that dictate its use.