On each payroll that you run, taxes are paid by both employers and employees in the payroll cycle.
Employer taxes are standard amounts, affected by the state and locality in which you are working.
You can estimate exactly how much tax you will pay in a given payroll cycle. But you should expect to pay an additional 18-22% of your gross wages in employer payroll taxes between federal, state, and local taxes.
Employees also pay taxes on each payroll for social security, medicare, federal income tax, state income tax, and local income taxes.
The amount that an employee needs to pay depends on several factors – including family situation, their number of dependents, and the anticipated amount of income in a given year. They report each of these factors on their W-4s each time they are hired, so that employers can calculate how much to withhold from their paycheck. Wrapbook collects this information digitally.
On each payroll cycle, Wrapbook will withhold (from an employee’s paycheck) taxes which are paid out to the various agencies listed above. A breakdown of how taxes were paid out is reported on each payroll’s paystub, which is sent to both the employee and the employer.
A breakdown of the payroll taxes is also provided to each employee when they receive a check in the mail.
*Please note that currently all local taxes are combined on the state taxes line just for the sake of invoice. The proper taxes are in fact taken out and will be shown on the W2 at the end of the year broken out.