Payroll Tax Compliance

Payroll tax compliance refers to the legal obligation for businesses to properly withhold, report, and remit taxes on employee wages to government authorities. This includes federal, state, and sometimes local taxes, such as income tax, Social Security, and Medicare contributions. Businesses must accurately calculate the amounts owed, file necessary forms on time, and ensure that employees receive their correct net pay. Failure to comply can lead to penalties, interest, and legal issues. Essentially, it ensures that the government receives its due from employee earnings while maintaining accurate records for both the employer and employees.