5: Payroll Taxes – Part 1 of Federal Payroll Tax Series

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What are Federal Payroll Taxes?

Welcome back! This is the first episode of a six-part series on Federal payroll taxes. In today’s episode we will identify and explain what makes up federal payroll taxes.

Today we will learn:

In today’s episode we will identify and explain what makes up federal payroll taxes.

Why do you need to know this?

  • Because you become a trustee for the US government when you pay your employees.
  • Because you are personally liable for the withholding, payment and reporting of the trust fund portion of payroll taxes.
  • Because you cannot delegate your responsibilities for paying your federal taxes. You are still responsible even if you use a third party to process your payroll and pay your taxes.

The Federal payroll taxes are:

  • Federal income tax (employee paid).
  • Social security and Medicare tax. Also known together as FICA (employee and employer paid).
  • Federal unemployment tax (employer paid).

Other Points:

  • The social security system is a Ponzi scheme.
  • The federal income tax resurfaced with the ratification of the 16th Amendment which gave birth to the Revenue Act of 1913.
  • The Current Tax Payment Act of 1943 that collection of the tax was an employer responsibility.
  • Social Security is also called Old Age, Survivor and Disability Insurance or “OASDI”. And medicare is also referred to as Hospital Insurance or “HI”.

Resources: 

About the author, Thomas

I have 20 of years insurance industry experience in C-level management, focusing on all aspects of workers compensation, risk management, loss control, employee benefits, HR, payroll and professional employer organization (“PEO”) operations. Currently, I am the owner and CEO of Humanly HR, and founder and host of SmallBiz Brainiac; a podcast providing employer intelligence to small business owners.

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