31/05/2018
California Payroll Compliance:
1. Employment Compliance Summary
1.1 Federal Social Security Tax: 6.2% on both employer and employee on the first $128,400 each employee earns each year
1.2 Federal Medicare Tax: 1.45% on both employer & employee (additional 1.0% for employee with annual income over
$200,000)
1.3 Federal Unemployment, FUTA: 0.6% on employee's first $7,000 earned each year (originally 6%, but usually 5.4% credit to
most cases)
1.4 Payroll Withholding Tax: based on W-4 schedule
1.5 Social security/Medicare/Payroll WH Tax: paid to IRS on either monthly/semiweekly
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2. Withholding Tax of Income
2.1 Submit Monthly/Semiweekly.
2.2 Each year end, W-2(individual wage)/W-3(corporation)/1099(other incomes) need to be filed to IRS by Jan. 31 in the following year.
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3. Pension is depending on each company’s pension plan. (about 6-8%)
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4. Individual income tax: form 1040.
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5. Employment Compliance Summary
5.1
Federal by Employer:
Federal Social Security Tax 6.2% (up to $128,700)
Federal Medicare Tax 1.45%
Federal Unemployment, FUTA 0.6% on the first $7,000 (maxim: $7,000*0.6%=$42)
Pension (usually sponsored by each employer, not required by law)
5.2
Federal by Employee:
Federal Social Security Tax 6.2% (up to $128,400)
Federal Medicare Tax 1.45%
Federal Income Tax, FIT
5.3
State by Employer (California):
California State Unemployment Insurance, SUI: 3.4% on the first $7,000 each employee earns each year for the first three years,
then the rate will be designated by state
Employment Training Tax(ETT): 0.1% on the first $7,000 each employee earns each year
5.4
State by Employee (California)
California State Disability Insurance, SDI): 1% of Salary up to $114,967
State Personal Income Tax, PIT
Every 15th each month, company needs to pay for previous month employment taxes: Employment Taxes (include Income Tax,
Social Security & Medicare Tax).
