May 19, 2016 |
You’ve learned all about what payroll taxes are and how to calculate payroll taxes, but what about reducing them? Have you ever asked yourself, how can I reduce my payroll tax? Is it even possible? Payroll taxes range from 10-18% of your total payroll. While they are important taxes to pay, there are legal ways to reduce some of them, which we will discuss in this blog.
This is the million-dollar question. How do you reduce employee turnover? Before we talk about how, let’s talk about why. Your state and federal unemployment taxes are calculated using several factors, one of them being your grade for unemployment claims. The more claims you have the worse your grade. The worse the grade, the higher the tax rate.
Raises are nice and highly appreciated by most employees. However, as the different generational groups rise in the workforce, they are looking for more than just a paycheck. Benefits like health insurance, tuition assistance and retirement benefits are extremely important. These are what is considered by the IRS “fringe benefits.” For a full list go to https://www.irs.gov/pub/irs-pdf/p15b.pdf. These benefits are exempt from FICA and FUTA taxes.
Reimburse items like gas-mileage and other business related expenses. If these are filed correctly and in a timely manner they can help decrease payroll taxes.
There may be more ways to reduce your payroll costs than just these few options. Talk to your CPA and find out the best ways to keep your payroll costs under control.