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6 Payroll tax tips every small business owner should know

Running a business is hard enough without worrying about payroll taxes. But staying on top of them is key—mess-ups can lead to big fines and frustrated employees. Here are six simple tips to help you stay compliant and keep things running smoothly.

1. Keep your records organized

Tracking hours, wages, and taxes might not be exciting—but it’s essential. When everything is neatly recorded, you’ll know you’re paying the right amount and can handle any questions from the IRS or your state with less stress.

2. Know what you need to withhold

There are a few key taxes to keep in mind:

• Federal income tax: Employees fill out Form W-4 to tell you how much to withhold. Use IRS tax tables to calculate the right amount.

• FICA (Social Security & Medicare): You and your employee each pay 6.2% for Social Security and 1.45% for Medicare. (That’s 12.4% and 2.9% total.) Social Security only applies to wages up to $176,100 for 2025, but Medicare applies to all wages.

3. Don’t forget the taxes you owe

In addition to what you take from employee paychecks, you may owe:

• Federal Unemployment Tax (FUTA): This funds unemployment benefits. Only employers pay this.

• State unemployment insurance: Rules vary by state, so check your local labor department for details.

4. Stay on top of deadlines

Missing a tax deadline can lead to penalties. Here’s what to know:

• Deposits: Depending on how much tax you withhold, you’ll deposit monthly or semi-weekly.

• Forms: Submit Form 941 each quarter and Form 940 each year (for FUTA).

Bonus warning: If someone in your business doesn’t pay payroll taxes on time, they could be personally responsible for the full amount (plus interest). That includes business owners and anyone handling the money.

5. Keep up with the rules

Tax laws change often. New rules can affect how much you owe or how you report it. Staying in the loop and avoiding payroll mistakes can save you from headaches (and surprises) later.

6. Ask for help when you need it

Payroll taxes can get tricky—especially if you have employees in different states or if your business is growing fast. Choosing the right payroll partner can help make sure everything’s done right, from choosing the best payroll system to filing the right forms on time.

Need a hand? Padgett works with small business owners every day and can help you stay on track with payroll, taxes, and more. Find your local Padgett office here!

The post 6 Payroll tax tips every small business owner should know appeared first on Padgett Advisors.