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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 17080
Experience:  10 years experience
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does employers match payroll taxes for independent contrac

Customer Question

does employers match payroll taxes for independent contractors?
Submitted: 3 years ago.
Category: Tax
Expert:  Wallstreet Esq. replied 3 years ago.

Wallstreet Esq. :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.

Wallstreet Esq. :

Independent contractors are paid a 1099, and no payroll taxes are paid by the employer or deducted from the contractors pay,

Wallstreet Esq. :

If deductions are made, the contractor may be considered an employee and a w2 with payroll taxes would have to be deducted and shared with the employer.

Customer: replied 3 years ago.

how is the employers matches the employees for payroll taxes?


Expert:  Wallstreet Esq. replied 3 years ago.
An employer is liable for the following federal employment taxes:
Federal income taxes
One-half of social security taxes
One-half of Medicare taxes
Federal unemployment insurance tax (FUTA)
FICA taxes include: social security and Medicare taxes. (FICA stands for Federal Insurance Contributions Act.)
Social Security Tax
Be aware, contractors do not have any payroll taxes taken out.

For 2012, the employee's share of the social security tax rate is reduced to 4.2%, from 6.2%, a 2% reduction. However, the employer's share of the tax remains 6.2%.
Medicare Tax
No change in 2012 for the Medicare tax; it remains 2.9%. The employer and employee each pay half of the 2.9% rate, 1.45%.
Federal Unemployment Taxes (FUTA)
FUTA tax is strictly an employer tax. Employees do not pay this tax. Only gross wages up to $7,000 paid to each employee is assessed FUTA taxes. For example, if you have two employees and paid gross wages of $15,000 to one of them and $6,000 to the other, total FUTA wages subject to the tax is $13,000 ($7,000 plus $6,000).