Joe Jaspers photo

Joe Jaspers, CFP®

Vice President, Wealth Management

 

Carolinas Telco Capital Advisors

Located at Carolinas Telco FCU

9813 South Blvd, Suite 101

Charlotte, NC 28273

 

Phone:     704-391-5600

Toll Free: 800-622-5305, ext. 2608

Fax:         704-556-1652

 

Email: joe.jaspers@lpl.com

January/February 2021

Payroll Taxes

Sole proprietors who decide to add employees need to understand payroll taxes.


Federal Taxes
Both you and your employee must pay 6.2% for Social Security and 1.45% for Medicare tax. As an employer, you’ll pay the federal unemployment tax which is 6% on the first $7,000 of each employee’s earnings. For high earning employees, you must withhold the Additional Medicare tax which is 0.9% of wages in excess of $200,000 in a year. Also, effective January, 2021, the Social Security tax will be collected on wages up to $142,800, up from $137,700.


Based upon your employee’s Form W-4 inputs, you’ll need to withhold federal income tax from their wages. The amount to withhold depends on things like tax filing status, number of dependents and whether the employee has multiple jobs.


State Taxes
If your employees complete work in a state with state income tax, you’ll need to withhold this tax from their wages. Most states require the employer to pay a state unemployment tax. Keep in mind some states also require employees to pay the state unemployment tax so this may need to be withheld from your employee’s paycheck.


Lastly, some cities, towns, and other local governments impose a payroll tax.


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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Carolinas Telco FCU and Carolinas Telco Capital Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Carolinas Telco Capital Advisors, and may also be employees of Carolinas Telco FCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, Carolinas Telco FCU or Carolinas Telco Capital Advisors. Securities and insurance offered through LPL or its affiliates are:

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