Social Security and Medicare taxes are imposed on both the employee at a flat rate of 6.2% for social security and 1.45% for Medicare and the employer ‘s single flat rate of 6.2% and 1.45%, respectively, creating a combined FICA tax rate of 15.3% (12.4% for Social Security and 2.9% for Medicare).

What are the 2018 corporate tax rates?

Federal tax rates After the passage of the Tax Cuts and Jobs Act, on December 20, 2017, the corporate tax rate has been changed to a flat 21% starting January 1, 2018 (previously 35%).

What is employer’s payroll tax expense?

Employer payroll taxes are incurred for those taxes that must be paid over and above wage and salary amounts. Generally, these include employer contributions to Social Security and Medicare plus state and federal unemployment taxes.

How are payroll taxes deducted on a corporate tax return?

Corporations deduct payroll tax expenses on Form 1120 (the corporate income tax return). These expenses are considered “taxes and licenses” and are fully deductible. The sum amount of payroll taxes paid (Social Security, Medicare, and Unemployment) is deducted on line 17 of the form.

Are there any tax deductions for a S corporation?

If you are a shareholder in an S corporation, you are probably wondering if these rules apply for your business as well. Thankfully, the answer is yes: on line 12 of Form 1120S, you are able to deduct the sum total of payroll tax expense (Social Security, Medicare, and Unemployment).

What kind of taxes do you have to pay on payroll?

In addition to this, corporations must pay Federal and/or State unemployment tax (FUTA or SUTA) for their employees. The FUTA tax rate is 6% up to the first $7,000 in wages. All of these payroll tax expenses are tax deductible for corporations.

What’s the maximum payroll deduction for an employer?

The maximum total is $25,000 for each eligible employer. For more information on the TWS, go to 10% Temporary Wage Subsidy for Employers. In Chapter 8, you will find more information on remitting payroll deductions, including the different remitter types and due dates, how to make a remittance, and the forms to use.