Florida is a popular destination for retirees not only because of the great weather but also because of the absence of state income tax.
Just because Florida doesn’t have state income tax doesn’t mean that you don’t have to worry about other types of taxes. As one of the 2.3 million Americans who own a small business in Florida, you are responsible for payroll taxes.
While it’s similar to the process for other states, you may find the process in Florida easier and more streamlined. For example, the laws about overtime and leave are not as restrictive as what you would find in other states. You can take advantage of the Paid Time Off (PTO) laws that require that employees use their time off within the year they accrued it. It’s the use-it-or-lose-it policy, which is beneficial to you as an employer for a variety of reasons.
How much are the payroll taxes in Florida?
Payroll taxes include Medicare tax, with a tax rate of 1.45% on the first $200,000, and Social Security tax, with a rate of 6.2% on the first $132,900. You’re also responsible for paying state and federal unemployment taxes.
- You’re required to pay a reemployment rate of 2.7% if you’re a new employer. That rate applies to $7,000 on an annual basis for every employee. Earnings above the $7,000 are not taxable under Florida payroll taxes.
- If you’re a new owner taking over a business, you can use the tax rate from the previous owner but you’re also liable then for any outstanding amounts that might be due.
- If you’ve been in business for more than 10 quarters, the tax rate can range from 0.10% to 5.4% per employee.
The maximum rate is 5.4%, but it can also be used as a penalty for late or delinquent payments of more than a year. An auditor can also assign the 5.4% if requests are not fully met and complied with. If you are assigned a high tax rate, you can appeal it if you file the appropriate paperwork, within 20 days.
Why is compliance so important?
It’s essential that you comply with requests for information and records, but it’s also important to stay on top of payment schedules and any other documentation requirements.
- Report new hires (and rehires).
- Verify weekly earnings.
- Report separations.
To avoid penalties and higher tax rates, it’s important to stay on top of all compliance documentation and payments, but it’s easy to overlook or miss the deadlines. That’s why so many companies are now turning to payroll services. The fact that they don’t have to worry about incorrectly filed documents or missed deadlines are just one small part of why payroll services really do save companies time and money.
Gone are: the frustration, the confusion, the guesswork, and indecision. Atlantic Payroll Partners offer the best payroll services to meet your needs. We can pick up where you left off and make it a streamlined, effective, accurate, and secure payroll solution that just runs like clockwork. You won’t ever have to worry about payroll taxes again.