Payroll Taxes: What New Employers Need to Know

by Sylvia Cuthbert

Now that you’ve hired your first employee and completed the required paperwork, it’s time to talk about payroll taxes. As an employer, you’re responsible for withholding certain taxes from your employees’ paychecks and paying additional taxes on their behalf. Here’s what you need to know.

1. Employer Payroll Tax Responsibilities

When you run payroll, you’ll need to withhold and remit the following:

✅ Employee Withholdings

These are deducted from your employee’s paycheck:

• Federal income tax – based on their W-4 form

• State income tax – if applicable in your state

• Social Security tax – 6.2% of wages (you withhold this amount from the employee)

• Medicare tax – 1.45% of wages (also withheld from the employee)

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✅ Employer Contributions

These are taxes that you pay as the employer, on top of what you withhold:

• Social Security tax – you match the 6.2% withheld from the employee

• Medicare tax – you also match the 1.45%

• Federal Unemployment Tax (FUTA) – usually 6.0% on the first $7,000 of wages, though most employers qualify for a reduced rate of 0.6%

• State Unemployment Insurance (SUI) – rates vary by state and employer history

2. Register for Tax Accounts

To run payroll, you’ll need a  Federal Employer Identification Number (EIN) .   Most businesses already have one, but if you’re just getting started, you can apply for one quickly and easily at irs.gov or we can help you register for one. Next, you’ll need to register for state tax accounts — typically one for state income tax withholding and one for state unemployment insurance (SUI). This usually involves registering with your state’s Department of Revenue and Department of Labor (or equivalent agencies, depending on your state).

💡 If we are processing your payroll for you, we will handle these registrations on your behalf. One less thing for you to worry about!

3. File & Pay Payroll Taxes on Time

Payroll taxes must be filed and paid on time to avoid penalties, interest, and potential compliance issues. Missing a deadline — even by a day — can result in costly consequences.

For your reference, here’s a general overview of the tax forms and filing schedule your business will be responsible for:

• Federal tax deposits – These are made either semi-weekly or monthly, depending on the size of your payroll. The IRS will notify you of your deposit schedule once you begin filing.

• Quarterly filings – IRS Form 941, the Employer’s Quarterly Federal Tax Return, must be filed four times per year (generally in April, July, October, and January).

• State tax filings – These vary by state. Most states require quarterly returns for state income tax withholding and state unemployment insurance, with an annual reconciliation due at year-end. Some states may require more frequent deposits, especially if your payroll is large.

• Annual filings – At year-end, you’ll need to provide W-2 forms to your employees and file them with the IRS and state agencies. You’ll also need to submit IRS Form 940, which reports Federal Unemployment Tax (FUTA).

✅ If we’re managing your payroll, we’ll handle all of these filings and payments for you — so you can stay focused on running your business, not tracking tax deadlines.

Final Thoughts

Handling payroll taxes can seem like a heavy lift, but with the right systems in place, it becomes part of your routine. Remember: staying compliant isn’t just about avoiding penalties — it’s also about building trust with your employees, protecting your business, and setting a strong foundation for future growth.

With expert guidance and the right tools, you can confidently navigate every step of the hiring and payroll process — and we’re here to help you do just that.

🧾 Overwhelmed by Payroll Tax Rules?

You’re not alone — and you don’t have to figure it out solo.

King and McCleary Payroll takes the guesswork (and the deadlines) off your plate. We’ll handle the filings, make the payments, and keep you compliant — so you can focus on growing your business.

Let’s talk about what payroll could look like when it’s done for you.

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