Payroll taxes are an essential part of running your own small business just like crinkled leaves of fire are essential to a Connecticut fall, nutmeg for a kitchen in the suburbs, and boats for long days sailing along the coast. But while The Land of Steady Habits has ideal essentials, payroll taxes are far from ideal.
Luckily, we’re here to help. Just call us the Long Island Sound of payroll taxes, the people who will shine the light to guide you all the way home to write those paychecks. All you need to do to access that light is enter wage and W-4 information for each employee and our payroll tax calculator will calculate all the Connecticut and Federal payroll taxes for you.
First and foremost, let’s pay Uncle Sam. Our handy payroll calculator can help you figure out the federal payroll tax withholding for both your employees and your business.
Below is a quick 6-step overview of everything that goes into calculating the payroll tax for your employees. If you prefer to see a more detailed calculation, we created a step-by-step guide just for you.
For employees who earn more than $200,000 in taxable wages, you need to withhold what’s called an Additional Medicare Tax (super original, we know). The rate is 0.9%. Only the employee is responsible for paying the Additional Medicare Tax.
However, you can claim a tax credit of up to 5.4% for paying your Connecticut state unemployment taxes in full and on time each quarter, which means that when everything’s said and done, you’ll only have to pay 0.6% FUTA tax. Your employees are not responsible for paying FUTA taxes.
Now that we’re done with federal income taxes, let’s tackle Connecticut state taxes. The State of Connecticut is on the high end of marginal income tax rates compared to the rest of the country. It’s a progressive income tax that ranges from 3% to 6.99%.
Connecticut does not have any local city taxes, so all of your employees will pay only the state income tax.
As an employer, you’re responsible for paying SUI (remember, if you pay your state SUI in full and on time, you get a 90% tax credit on FUTA).
SUI tax rates range from 1.9% to 6.8%. New employers pay 3.4% in 2019. The taxable wage base is $15,000 for each employee.
OnPay processes payroll and automates all your tax payments and filings.
Give yourself a high-five because you are now done! Once you’ve calculated your employees’ net pay by taking out the appropriate withholdings, you’re ready to cut their checks.
In addition to making sure your employees get paid on time, don’t forget to set aside the employer taxes your company is responsible for. Those FICA and FUTA and SUI payments can add up if you don’t remit them on a regular basis.
Use Form 941 to file federal taxes quarterly. Use Form 940 to report your annual FUTA tax. You can pay taxes online using the EFTPS payment system. You can find more details about employment tax due dates here.
If all that wasn’t enough, and you want to learn more about Connecticut payroll taxes, here are a few websites we suggest you check out: