Payroll taxes are most often described as balanced taxes. It makes both the employee section and the employer’s section involve. Both the employer’s and employee’s salaries are omitted and both of the amounts get submitted into the government treasury. Now the point here comes when the payroll taxes levied against employees become liabilities. Does it really happen? Let’s discuss this.
Payroll Taxes Levied On Employees. Good Idea?
Well, the debate always gets wider and wider with each passing year. Therefore, the conclusion never comes up with an everlasting solution. Employees already become the bait of huge taxes. The employers instead of assisting and supporting the employees, cut the huge margin of taxes from the employee’s salaries. When it comes to payroll taxes both need to step up and pay their share of taxes but unfortunately, the only one-sided results we see. Only employees pay the payroll taxes while the employers redeem them. Hence, payroll taxes levied against employees become liabilities is true and not a good idea.
Payroll taxes levied against employees become liabilities
Yes, it happens, the liabilities started to come when the payroll tax against an employee is paid. But it happens only at the time when the payroll is paid. The liabilities include
- Medical assurance or Medicare
- Social security
- Federal and state income taxes withheld from employees’ paychecks (plus local or city taxes, if applicable)
So the final pinpoint revolves around either the levied payroll taxes against employees are somehow justified or not. Rather proving this point, let’s come to reality. The system is employers-friendly, especially in the US. The employees do not get a fair deal, in spite of paying their own taxes, employers cut the tax from employee’s salaries and pay those omitted on behalf of themselves to the IRS (Internal Revenue Service). Hence, it turns out to be an injustice to the employees.
Well, Employee Retention Credit is now available for the businesses financially hit by the pandemic.