Payroll deductions should include state income tax and payroll insurance deductions
As a Professional Employee Organization, our clients ask us to handle their payroll responsibilities including two of the most talked about deductions: their state income tax and payroll insurance deductions.
The state income tax is part of the statutory payroll tax deductions.
As required by law, statutory Payroll Tax Deductions are payroll taxes that must be withheld from your employees paycheck. You must hand these withholdings over to the multitude of tax agencies on all levels of government.
- Local tax withholdings (city, county, or school district taxes, state disability or unemployment insurance).
- State income tax withholding
- Federal income tax withholding
- Social Security tax withholding
- Medicare tax withholding
The payroll insurance deductions are part of the Voluntary Payroll Deductions
Voluntary deductions pay for various benefits which the employee has chosen to participate in. Voluntary payroll deductions are withheld from an employee's paycheck only if the employee has agreed to the deduction.
Voluntary payroll deductions include the following:
- Retirement plan contributions (such as a 401k plan)
- Health insurance premiums (medical, dental, and eyecare)
- Life insurance premiums
- Meals, uniforms, union dues and other job-related expenses
- Employee stock purchase plans (ESPP and ESOP plans)
Voluntary deductions can be paid with pre-tax dollars or after-tax dollars, depending on the type of benefit being paid for.
As a business owner, decisions you make about state income tax and payroll insurance deductions issues are important ones to make correctly. Always consult with your HR advisors when these issues come up.
At Modern Business Associates, we deal with state income tax and payroll insurance deductions as a daily part or our business. Our clients outsource their payroll processing to us. We take pride in working with our St. Petersburg and Tampa clients, as well as clients from across the nation. Please contact us for more information about utilizing an HR company and any specific questions about our services. Our goal is for you to make the best informed decision for your St. Petersburg or Tampa-based company.
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