Payroll Tax Percentage

Hi All - just curious…what are your monthly payroll taxes running either as a percentage of payroll or a percentage of net sales?

We are in Texas and mine seem to be running really high - like 35% of total monthly payroll expense.

Let me know what you guys think…

If you are adding FICA to withholding it could be that high. If you are talking only withholding, that number is too high.

Shouldn’t we all have pretty much the same payroll tax percentages? FICA is composed of Social Security (6.2%) and Medicare (1.45%) for a total of 7.65%. Then we pay an additional 0.8% on the first $7,000 of each employee’s income for FUTA.

You are probably paying into state unemployement as well; mine is 0.4% of total wages. So all told, I pay 8.85% of gross wages.

Are you including federal and state income tax withholding into your calculations? Are you including the employee’s share of FICA? Those amounts come straight out of the employees gross pay; that isn’t your expense.

Your payroll tax expense is your portion of FICA, Medicare, State Unemployment & Federal Unemployment - take those totals and divide by your sales.
Your wages are the gross wages paid out divided by your sales.
Sometimes when you are comparing these 2 are added together as total Payroll expense.
so if you go to the sample P&L located in the managers toolkit, you will see it is identified as Labor Expense (Gross wages plus all the taxes) on average is 32-34%. so if your running @ 35% TOTAL - this seems reasonable. And if this number includes ALL wages (manager, labor &/or owners ) then this is a Great number - imo.
If you need a quick & easy payroll processor - let me know - I can set you up for around $25/month up to 15 people - run checks once a week - includes direct deposit, w-2’s - also can run 1099’s through it.