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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15607
Experience:  15years with H & R Block. Divisional leader, Instructor
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How is payroll taxes calculated. My partner and I are set up

Customer Question

How is payroll taxes calculated. My partner and I are set up as a SCorp. We pay ourselves as employee's. Filing status 15% withholding. We pay weekly overhead contribution. (Equal). Social Security 6.2% . Medicare 1.45%.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


Employers (in your case the S corp) generally must withhold federal income tax from employees' wages.

To figure out how much tax to withhold, use the employee’s Form W-4 and withholding tables described in Publication 15, Employer's Tax Guide. The W4 advises how many allowances to apply for the withholding on income tax. The tables in the publication are split into payroll periods, pay amount, and allowances.

Employers generally must withhold part of social security and Medicare taxes from employees' wages too and you pay a matching amount yourself. This information too is in Pub 15. For 2015, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4% total). The social security wage base limit is $118,500. The tax rate for Medicare is 1.45% (amount withheld) each for the employee and employer (2.9% total). There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax.

ADP has a calculator that makes this easy and you can use it for free

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