Payroll Tax Definitions

Important payroll tax definitions to better understand payroll for your small business 

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Payroll Tax Definitions

Our glossary will help you understand the ins and outs of payroll taxes.

The following payroll tax definitions will help you learn the basic terminology used by your CPA, payroll manager, SurePayroll, and other industry professionals. With the help of these definitions, you’re able to more easily answer questions such as:

  • What is included in payroll taxes?
  • What’s the difference between state and federal payroll taxes?
  • Which employer payroll taxes are you responsible for paying?
  • What is the 2019 payroll tax rate?
  • How are payroll tax percentages set?

As you answer these questions – among many others – you can also experiment with our payroll tax calculator. It only takes a few seconds to complete the required fields, receive a custom quote, and start your free trial.

We hope these payroll tax definitions answer all of your questions while providing a clear idea of what your business requires to maintain compliance.

Accountable Reimbursement Plan An accountable reimbursement plan is a method for reimbursing employees for qualified business expenses.
Electronic Federal Tax Payment A simple and efficient way for business owners to pay federal taxes online or by telephone.
Federal Payroll Forms Forms that provide the IRS with important information, such as who is working for a company, their wages, and withholding details.
Federal Payroll Tax Income taxes paid by an employee toward government programs such as Medicare and Social Security.
Federal Payroll Tax Chart A chart that gives employers the amount to deduct from the gross pay of each employee.
Federal Tax Withholding Table A table that helps employers calculate how much income to withhold from their employees. This is typically in the form of federal income tax, state income tax (depending on location), Medicare, and Social Security.
Federal Unemployment Tax Employers are required to pay the Federal Unemployment Tax, which is used to pay for unemployment insurance. For each worker, the tax is set at 6 percent of the first $7,000 earned each year.
Federal Unemployment Tax Act The Federal Unemployment Tax Act (FUTA) regulates the Federal Unemployment Tax, which is set at 6 percent of the first $7,000 earned each year (2019) for every employee.
Payroll Tax Table A payroll tax table consists of several columns to help employers calculate the appropriate taxes to withhold from an employee’s paycheck.
Payroll Taxes Payroll taxes are imposed on both employers and employees, and fall into two categories: taxes paid by the employer, and deductions from an employee’s wages.
Payroll Withholding Federal income tax withholding is based on two factors: the amount of income a person earns, and the number of dependents. A new employee must complete Form W-4 at the time of hire, as this includes their name, address, Social Security number, and number of dependents to claim.
SUI Rates SUI, which stands for State Unemployment Insurance, is an employer-funded tax designed to provide short-term benefits to those who are terminated or leave their job as the result of poor health or personal reasons. The SUI rate differs by state.