Payroll taxes are one of the most common places small businesses get penalized — not because owners are careless, but because the rules are genuinely confusing.
Taxes you withhold from employees:
- Federal income tax (based on their W-4)
- Social Security tax (6.2% up to the annual wage base)
- Medicare tax (1.45%, plus an additional 0.9% for high earners)
- State and local income tax, where applicable
Taxes you pay as the employer:
- Matching Social Security (6.2%) and Medicare (1.45%)
- Federal unemployment tax (FUTA)
- State unemployment tax (SUTA), rate varies by state and your claims history
Filing deadlines that trip people up. Federal tax deposits are due semi-weekly or monthly depending on your deposit schedule, quarterly Form 941 reports are due four times a year, and annual W-2s must reach employees by January 31.
The penalty risk. The IRS can charge penalties of up to 15% of unpaid payroll tax, and personal liability can extend to business owners in some structures — payroll tax debt doesn’t disappear in bankruptcy the way other business debt can.
The fix most small businesses land on: software that calculates the right withholding automatically and files on the correct schedule, so deadlines aren’t something you have to track manually.
How Onyx helps: automatic tax calculations updated for current federal and state rates, on-time filing, and audit-ready records — so tax season isn’t a scramble.
