Payroll Taxes – An overview
To put it simply, payroll tax is your liability to state on the salary you pay to your employees. You are liable to pay this tax only when you cross a fixed threshold that may differ per state. It’s tough for most business owners to keep a check of payroll tax, as they tend to creep up, often, when you are not expecting it least.
Payroll Taxes An Overview
What Are My Obligations?
Not only gross wages but superannuation, incentives and commissions along with benefits and allowances fall under payroll tax. Generally payable on a monthly basis, you have to comply with the regulations set by your state for payroll tax.
Apart from the monthly payroll tax form, you are also subjected to file an Annual Reconciliation Form once in a year to report the taxable wages paid over a year. You are supposed to submit the Annual Reconciliation Form for different states if you employ staff in different states.
Filing Payroll Tax
Bookkeeping experts from top bookkeeping outsourcing firms asserts the importance of filling this tax on a monthly basis. As this can account to a huge amount in a very short time, you should keep track of it at close quarters.
In most territories, the state provides warning for payroll tax dues, but it is up to the employer to judge whether the total gross wages has exceeded the minimum threshold or not. You are supposed to do self-assessment of your liabilities and clear the dues accordingly; the concerned state department does keep a close eye on business wage levels and conducts regular audit in tandem with tax department, so chances of getting caught are high if you flout the rules.
Doing it the Right Way
To increase accountability, you can integrate several tools with your accounting software that provides reports on a timely basis to keep you updated. If you want to add value to your bookkeeping than outsourcing is a great option. By hiring a reliable accountancy service, you can sit back coolly, and let someone else do the hard work for you.