Understanding Employee Leasing Pricing: Statutory - "Pass-Through" costs

Federal Insurance Contributions Act (FICA)

As an employer you are required to withhold social security taxes from employees and pay a matching amount of these taxes. The matching amount is your obligation as an employer. FICA amounts are billed at 6.2% of wages up to a wage cap of $87,000 (2003) per employee. As an employer you really have two responsibilities for FICA. First to withhold and remit the amounts for the employee and second to pay your matching share as the employer.

Your Employee Leasing quotes will show the “pass-through” amount for only the employer’s portion of FICA. While calculating your payroll, the Employee Leasing will calculate and withhold the employee’s portion automatically. The employer’s portion of the FICA obligation will be shown as a “pass-through” amount collected from you by the Employee Leasing company and remitted to the government.

For more information about your employer related liability for FICA see page 15 of IRS publication Circular E, Employers Tax Guide.

Medicare

Just like the withholding for FICA, Medicare is billed at 1.45% to the employee and 1.45% to the employer. The difference is that the Medicare tax is not wage capped and applies to all employee wages. The employer’s portion of the Medicare tax obligation will be shown on a Employee Leasing quote as a “pass-through” amount collected from you by the Employee Leasing company and remitted to the government.

For more information about your employer related liability for Medicare see page 15 of IRS publication Circular E, Employers Tax Guide.

Federal Unemployment Taxes (FUTA)

Your Employee Leasing quotes will include a “pass-through” charge for your company’s Federal Unemployment Taxes (FUTA). In general, any amounts shown for FUTA on a Employee Leasing quote will show a FUTA amount of .008 or .8%. When you engage a Employee Leasing company, they are responsible for depositing the FUTA payments and filing the Form 940.

For more information about your employer related liability for FUTA see page 27 of IRS publication Circular E, Employers Tax Guide.

State Unemployment Taxes (SUTA)

Your Employee Leasing quotes will contain a charge for SUTA. For more information about your SUTA related liability see our SUTA information page.

StaffMarket Services, LLC
431 12th Street West, Suite 202
Bradenton, Florida 34205 (get map)
Phone: 941-750-9450 - Fax: 877-471-5608
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