What are the employment taxes a small business has to pay?

Small business owners often have great responsibilities while operating and managing a business. Small business owners often have great responsibilities while operating and managing a business. Before you become an employer and hire employees, you need a Federal Employer Identification Number (EIN). If you have employees, you are responsible for several federal, state, and local taxes. As an employer, you must withhold Federal income tax, Social Security and Medicare taxes, and Federal unemployment tax act (FUTA). For more information on these taxes refer to Publication 583, Starting a Business and Keeping Records.

As an employer, you are also responsible for timely depositing and withholding federal income, your matching share of social security and Medicare taxes from your employees’ wages and any federal unemployment tax act (FUTA) taxes. Refer to Publication 15, Circular E, Employers Tax Guide.