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Payroll Tax |
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Payroll tax actually indicates to two various kind of taxes. These two kind of taxes are consisting of taxes which employers are needed to deduct from the pay package of the employees in their concerns, and it is also known as the deduction which is known as the Pay-As-You-Earn (PAYE) or Pay-As-You-Go (PAYG) tax. There is another form of tax payment which is known as or directly related to the employment of a worker who is getting paid from from the own funds of the employer.
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These kind of taxes may be either fixed charges or it is proportionally linked to an the payment of an employee. In this modern economic system there are various forms of payroll taxes. In various economic systems the role of payroll taxes are different. Here for your benefit we are providing you with detailed information about the role of Payroll tax in various systems:
- Payroll Tax in Brazil: In the economic system of Brazil the employers are expected to withhold altogether 11% of the employee's wages for the purpose of social security and a certain percentage of income as the Income Tax. This aspects has been determined according to the applicable tax bracket in that country. The employer is also expected to contribute an additional 20% of the total payroll value to the system related to social security. As it depends on the main activities of the company, that is why it must also be contributed to the main activity. It must also contribute to the insurance of federally-funded nature and educational programs. The deposition of altogether 8% is also required for the wages of the employee into a bank account which can only be withdrawn from when the employee is sacked or if there is yielding of certain other extraordinary circumstances which is known as the Security Fund for Duration of Employment. All these shares make up a total tax burden of almost 40% of the payroll over the employer and in case of the employee's wages it comes to 15%.
- Payroll Tax in Australia: In the Australian economic system the Payroll Tax is a specific tax and it is paid to the individual states and territories not by the employees but by the employers. In their economic system the Government of Australian requires only one tax which is withheld from the paychecks, the PAYG tax which includes also the Medicare levies.
- Payroll in U.S.: In the economic system of U.S., the employers are expected to withhold the federal income tax. In addition to this there are one-half of the Social Security tax, and one-half of the Medicare tax which will be added with the payroll tax. In this context, shares of both the employer and employee comes within the scope of the Social Security and Medicare taxes which are termed as the FICA tax. In certain places, employers are expected to deduct state income tax and sometimes the city income tax. Though there are burdens of so many formalities, but still the employer is expected to pay both the state and Federal unemployment tax.
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