PAYROLL SERVICES
When hiring a new employee, it is the duty of any employer to properly document it. You can hire an employee either on staff or outsourced.
WHEN HIRING ON FORM W2, AN EMPLOYEE MUST FILL OUT FORM I9 AND W4 BEFORE THE FIRST PAYROLL.
When working with independent contractors, the employer also has a duty to document. If the payments to such a contractor amounted to more than $600, the employer should ask the contractor to fill out Form W9. If the contractor is located or provides a service in the United States and is a foreign contractor - Form W8-BEN.
WHAT IS THE DIFFERENCE BETWEEN EMPLOYEE AND CONTRACTOR TAXATION?
CONTRACTOR
In the case of a contractor, the contractor's responsibility is to pay taxes. The employer only has to submit to the tax a copy of Forms 1099 and Form 1096, in which he summarizes the information about all contractors.
By January 31 of the year following the reporting year, the employer must send W2 forms to employees and Form 1099 to contractors.
EMPLOYEE
If it is an employee, then the employer must withhold part of the taxes from the employee's salary, and the employer also pays half in addition.
Also, the employer has the obligation to send reports to the tax service quarterly or once a year. These are the forms: 940, 941, 943, 944 or 945.
PAYROLL PROCESS
1 step
Payroll
2 step
Preparation of personnel documents
3 step
Preparing monthly, quarterly and annual payroll reports
4 step
Calculation and payroll: hourly, commissions, bonuses
Well done!
HERE ARE TAXES WHEN A SALARY IS ACCRUED AND PAID:
- The social security tax is 6.2%, there is a progressive scale.
- Medicare tax – 1.45%.
- State unemployment tax – 2.7% - 3.4%, depending on the number of employees of the company.
- Federal unemployment tax – 0.6% (there are exceptions by state).
If you contact our company for a payroll service, we will help you save time, money, and you will also be able to focus entirely on conducting your core business.
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