Introduction to Payroll

Question 1

Medicare

Answer 1

Medicare provides basic health insurance to people age 65 and over.

Question 2

Social Security

Answer 2

ERs withhold along with pay their ‘s share of the taxes, send those taxes to the IRS, and report the employee’s earnings to the SSA.

Self-employed individuals pay their own social security taxes when they file their tax return, and IRS reports their earnings to SSA.

There are three major categories of benefits paid through social security:

• retirement,
• disability, and
• survivors.

Question 3

Unemployment Insurance Tax

Answer 3

In most states, only the employer is responsible for paying the federal and state taxes that support the unemployment insurance system.

Employees working in Alaska, New Jersey, or Pennsylvania, though, are required to pay part of the state unemployment insurance tax.

The federal unemployment tax is not withheld from employees’ wages.

Question 4

Disability Insurance Tax

Answer 4

SDI tax exists only in five states
CA, HI, NJ, NY, RI and Puerto Rico.

Both ER’s & EE’s pay taxes into SDI

CA, NJ, RI have a Paid Family Leave program (PFL) that is paid for with EE contributions. The rate is included in each state’s disability insurance rate.