Employment Taxes encompass various taxes that employers deduct from employees’ wages and submit to the government. These include federal income tax, Social Security tax, and Medicare tax. Employers may also withhold and remit state, local, and unemployment insurance taxes. Requirements vary based on jurisdiction and employment arrangement. Compliance is crucial to avoid penalties and legal issues.

Federal income tax is based on an individual’s income and filing status. Employers deduct the appropriate amount from employees’ pay and send it to the government. Social Security tax finances retirement, disability, and survivor benefits. Both employers and employees contribute a percentage of wages to Social Security. Currently, Social Security tax is 6.2% for both employees and employers. Resulting in a total tax rate of 12.4%. Medicare tax funds healthcare benefits for individuals aged 65 and above. Employers and employees both contribute a portion of wages to Medicare. Medicare tax rate is 1.45% for both employees and employers. However, if you are self-employed, you are responsible for paying both the employee and employer portions, resulting in a total Medicare tax rate of 2.9%.